Mirror Review
August 29, 2025
For years, Nvidia has been the king of AI chips. Its hardware powers everything from ChatGPT to the world’s biggest AI labs. But in China, the game is changing.
U.S. export controls have cut off Nvidia from selling its most advanced chips to Chinese firms. In fact, the company sold zero H20 chips to China in the last quarter, leaving a major gap in the market.
And into that China AI Chip market gap stepped a little-known domestic competitor: Cambricon.
Founded in 2016, the Beijing-based chipmaker, Cambricon, stunned markets by posting a 4,300% revenue surge in the first half of this year, hitting $402.7 million and recording its first profit. Its market value has now risen to around $80 billion, making it one of the hottest tech stocks in China.
A Push for Self-Sufficiency
Beijing has made it clear: China cannot rely on foreign technology, especially when it comes to critical areas like semiconductors.
This push for self-reliance means local giants such as Alibaba and Baidu are now turning to domestic suppliers for the chips they need to train and deploy AI models.
As analyst Stacy Rasgon put it: “There’s a big push in China for self-sufficiency.”
That policy tailwind gives Cambricon Technologies a unique advantage.
It doesn’t just sell chips, but it builds an ecosystem of products, from smart accelerator cards to edge computing modules, designed specifically for China’s fast-growing AI sector.
Nvidia’s China Dilemma
For Nvidia, the situation is complicated.
Globally, the company is still miles ahead. Its quarterly revenue runs in the tens of billions, dominating Cambricon’s results.
Its CUDA software ecosystem remains the industry standard, with millions of developers tied into it.
But in China, Nvidia faces a double bind:
- Export bans prevent it from selling its top chips.
- Local innovation is accelerating, with reports that some Chinese-made chips already outperform Nvidia’s restricted H20.
CEO Jensen Huang himself has warned that strict U.S. trade controls would only “galvanize local players” to innovate, and that’s exactly what’s happening.
A Temporary or a Real Shift?
Cambricon’s own management admits the company’s soaring stock price may have “deviated from fundamentals.”
The 9% drop after that warning shows how volatile the hype can be.
Yet the long-term trend seems clear: even if Cambricon is far smaller than Nvidia today, its growth is fueled not only by market demand but by national strategy.
That combination of policy support, capital inflows, and ecosystem building means Nvidia could permanently lose its China advantage.
The Road Ahead
- For Cambricon: The challenge is proving it can move beyond hype. Sustaining growth will require scaling production, keeping pace with Nvidia’s innovation, and building developer loyalty.
- For Nvidia: The China market, once a major growth driver, is now slipping away. To stay relevant, it must fight for regulatory approval to sell Blackwell chips in China or risk being locked out of the world’s second-largest AI market.
- For the industry: What’s happening in China may signal a split in the global semiconductor landscape — one ecosystem led by the $4T Nvidia in the West, and another built around domestic champions like Cambricon in China.
Bottom Line
Cambricon Technologies is nowhere near Nvidia in scale, but it doesn’t have to be.
With Beijing’s backing and a fast-maturing ecosystem, it’s already filling the void in the China AI Chip Market left by US sanctions.
That makes it not just a fast-rising stock, but a strategic pressure point for the world’s most valuable chipmaker.
The China AI Chip market race is no longer about raw performance. It’s about who controls the ecosystem.
And in that fight, Cambricon is emerging as Nvidia’s biggest headache in the East.
