Amid the clear technological edge that the United States holds over China in artificial intelligence (AI) semiconductor technology, evaluations have emerged indicating that China is rapidly closing the gap in algorithms and application fields.
Harry Shum, who previously led the AI and institutional sector at Microsoft, noted on the 28th (local time) during an economic summit hosted by the Hong Kong University of Science and Technology Business School that “AI competition occurs in three pillars: chips, algorithms, and applications, and the United States is ‘clearly’ ‘far ahead’ in the chip sector.”
Shum pointed out, “It will be difficult for China to catch up with the United States in chip production technology within 1 to 2 years,” and “Chinese mainland and Hong Kong corporations are still facing significant restrictions in terms of computing performance.” However, he diagnosed that “China is competing very closely in algorithm development and may even be ahead in application fields.”
The corporation Shum cited as a representative example is the AI startup DeepSeek. DeepSeek achieved performance similar to that of language models implemented by major U.S. corporations with only around 10,000 AI chips. The two large language models released earlier this year have shown performance comparable to Western models while being evaluated as having significantly lower development expenses.
Shum explained, “The performance is a case showing China's potential in algorithm optimization and resource efficiency,” and added, “While the United States is pushing forward with capital and infrastructure, China is competing through a technology-intensive approach.”
He further stated, “While the United States has dominated the chip and hardware ecosystem, China is seeking breakthroughs in software efficiency and algorithms,” and noted, “The AI competition landscape is unfolding not simply as a superiority of technological capabilities but as a complex phenomenon.”
The competition between the U.S. and China surrounding AI hegemony has recently intensified. Last week, OpenAI stated that China's startup Jifubai has made meaningful progress in the non-Western market, assessing that “the U.S. monopoly position in the rapidly changing AI market is being challenged.”
Chinese corporations are accelerating the acquisition of their own AI infrastructure following the U.S. export controls tightening. Companies like Huawei are focusing on developing domestically produced AI chips to replace NVIDIA chips, but there is still a technological gap. Ren Zhengfei, chairman of Huawei, also recently acknowledged that “Ascend chips are one generation behind the United States” and claimed that “the U.S. is exaggerating Huawei's achievements.”
Despite these realistic limitations, Shum viewed the potential for technology growth in China positively. He stated, “In terms of application fields, China can achieve very notable innovations,” and added, “The outcome of future AI technology competition will depend on who can effectively coordinate the balance of hardware, software, and algorithms.”