US and China seek digital sovereignty
Last week, Beijing banned its tech giants from buying Nvidia's downgraded Ia chips, such as the B40 and H20 series, mainly because accepting these downgraded versions would, according to comments in the 'South China Morning Post', mean accepting US-imposed technological inferiority and reinforcing dependence on American suppliers. Instead, the Chinese authorities are urging domestic companies to avoid buying these chips and are pressing them to justify any orders for foreign models over increasingly competitive local alternatives.
Beijing's response is part of a broader push for technological self-sufficiency and national security, which prioritises the development and adoption of domestic Ia hardware over dependence on intentionally limited foreign products. Recent US export controls, which ban high-end Ia chips but allow alternatives with lower specifications, have triggered a policy shift in China from tolerance of dependence to an urgent campaign for semiconductor independence.
This position represents a turning point, shifting China's approach away from integration into global supply chains (led by the US) towards a long-term commitment to domestic technological capabilities and reduced dependence on US technology. Internationally, this sets the stage for accelerated decoupling in critical technology sectors as both the US and China move towards protectionism, with each side harnessing state power to promote domestic innovation and lock in technological dependencies.
China's refusal is not only due to technical or commercial considerations, but also to a clear strategic objective: to refuse to legitimise technological restrictions that would consolidate a position of subordination and redirect attention towards achieving technological sovereignty.
As Andrew Ng noted, China now believes it has made sufficient progress in the semiconductor sector to be able to chart its own course. Meanwhile, the US chip supply remains dangerously concentrated. Most of the cutting-edge nodes still come from Taiwan's TSMC. Even with the Arizona plant coming on stream, labour shortages and fragile supply chains mean that the US remains exposed to geopolitical shocks in one precarious geographic area. In the semiconductor sector, China is moving towards independence, while the US is faced with a single weak point: Taiwan.
