Huawei's 7nm Chip Stalls Expose China's AI Weakness--While Rivals Race Ahead
Warning! GuruFocus has detected 4 Warning Signs with NVDA.
Export controls appear to be doing exactly what they were designed to doslow China down. With ASML still blocked from selling EUV lithography machines to Chinese firms, SMIC hasn't yet cracked scalable 5nm production, which is the entry ticket to high-end AI, cloud, and mobile chips. Washington's restrictions on Nvidia (NASDAQ:NVDA) chips have also kept Huawei boxed out of the training game for top-tier AI models. Even so, Huawei has leaned into homegrown solutions, running its new devices on HarmonyOS and stacking chips to try and bridge the performance gap.
But scale is the real testand here's where the ceiling hits. U.S. officials said Huawei could be capped at just 200,000 units of its Ascend AI chip in 2025, a far cry from global AI leaders. Still, founder Ren Zhengfei isn't backing down. In a recent interview, he brushed off the impact of sanctions and pointed to workarounds like chip stacking. Investors watching China's tech race will be asking the obvious question: is that enough to stay in the gameor just enough to survive?
This article first appeared on GuruFocus.
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Associated Press
28 minutes ago
- Associated Press
OpenAI's advisory board calls for continued and strengthened nonprofit oversight
OpenAI should continue to be controlled by a nonprofit because the artificial intelligence technology it is developing is 'too consequential' to be governed by a corporation alone. That is the message from an advisory board convened by OpenAI to give it recommendations about its nonprofit structure — delivered in a report released Thursday, along with a sweeping vision for democratizing AI and reforming philanthropy. 'We think it's too important to entrust to any one sector, the private sector or even the government sector,' said Daniel Zingale, the convener of OpenAI's nonprofit commission and a former adviser to three California governors. 'The nonprofit model allows for what we call a common sector,' that facilitates democratic participation. The recommendations are not binding on OpenAI, but the advisory commission, which includes the labor organizer Dolores Huerta, offers a framework that may be used to judge OpenAI in the future, whether or not they adopt it. In the commission's view, communities that are already feeling the impacts of AI technologies should have input on how they are developed, including how data about them is used. But there are currently few avenues for people to influence tech companies who control much of the development of AI. OpenAI, the maker of ChatGPT, started in 2015 as a nonprofit research laboratory and has since incorporated a for-profit company with a valuation that has grown to $300 billion. The company has tried to change its structure since the nonprofit board ousted its CEO Sam Altman in Nov. 2023. He was reinstated days later and continues to lead OpenAI. It has run into hurdles escaping its nonprofit roots, including scrutiny from the attorney generals in California and Delaware, who have oversight of nonprofits, and a lawsuit by Elon Musk, an early donor to and founder of OpenAI. Most recently, OpenAI has said it will turn its for-profit company into a public benefit corporation, which must balance the interests of shareholders and its mission. Its nonprofit will hold shares in that new corporation, but OpenAI has not said how much. Zingale said Huerta told the commission their challenge was to help make sure AI is a blessing and not a curse. To grapple with those stakes, they envision a nonprofit with an expansive mandate to help everyone participate in the development and trajectory of AI. 'The measure of this nonprofit will be in what it builds, who it includes, and how faithfully it endures to mission and impact,' they wrote. The commission toured California communities and solicited feedback online. They heard that many were inspired by OpenAI's mission to create artificial intelligence to benefit humanity and ensure those benefits are felt widely and evenly. But, Zingale said many people feel they are in the dark about how it's happening. 'They know this is profoundly important what's happening in this 'Age of Intelligence,' but they want to understand better what it is, how it's developed, where are the important choices being made and who's making them?' he said. Zingale said the commission chose early on not to interact with Altman in any way in order to maintain their independence, though they quote him in their report. However, they did speak with the company's senior engineers, who they said, 'entered our space with humility, seriousness, and a genuine desire to understand how their work might translate into democratic legitimacy.' The commission proposed OpenAI immediately provide significant resources to the nonprofit for use in the public interest. For context, the nonprofit reported $23 million in assets in 2023, the most recent year that its tax filing is available. The commission recommend focusing on closing gaps in economic opportunity, investing in AI literacy and creating an organization that is accessible to and governed by everyday people. 'For OpenAI's nonprofit to fulfill its mandate, it should commit to more than just doing good - it should commit to being known, seen, and shaped by the people it claims to serve,' they wrote. The commission suggested opening a rapid response fund to help reduce economic strains now. Zingale said they specifically recommended funding theater, art and health. 'We're trying to make the point that they need to dedicate some of their resources to human to human activities,' he said. The commission also recommend setting up a requirement that a human lead the nonprofit, which Zingale said is a serious recommendation and 'a sign of the times.' ___ Associated Press coverage of philanthropy and nonprofits receives support through the AP's collaboration with The Conversation US, with funding from Lilly Endowment Inc. The AP is solely responsible for this content. For all of AP's philanthropy coverage, visit
Bloomberg
28 minutes ago
- Bloomberg
China's Underused Car Factories Are Flooding the World With Exports
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'Regional markets will take a hit but the price competition isn't likely to be as intense as in China.' To understand the global impact, one needs to first start in China, the world's biggest automobile market. There, only about 15% of some 70 active automakers tracked by Gasgoo Automotive Research Institute last year had a factory utilization rate of 70% or more, a benchmark widely considered as the minimum viable for profitability and sustainability in a mature market. Many automakers fell far short of the benchmark utilization rate in 2024 BYD, the world's largest new-energy vehicle producer, has maintained stable production levels, consistently pumping out cars and running its factories at utilization rates of between 80% to 85% from 2022 to 2024. Several key foreign manufacturing joint ventures, however, have witnessed significant declines in production rates, notably the SAIC-GM alliance, a grouping between state owned SAIC Motor Corp. and US automaker General Motors Co., and GAC-Honda, a tie up between Guangzhou Automobile Group Co. and Japan's Honda Motor Co. Read more: GM Is Pulling Back in Chinese Car Market It Once Pioneered Tesla Inc., which makes the Model 3 electric sedan and Model Y sport utility vehicle at its Shanghai plant for domestic consumption and export to other parts of Asia and Europe, ranked No. 1 in terms of capacity utilization, at 96%. Rising star Xiaomi Corp. was second, with the overwhelming popularity of its initial offering, coupled with order hikes for its recently debuted YU7 SUV, requiring a swift ramp up in production. Xiaomi doesn't sell its EVs abroad, yet. But amid a cooling domestic economy and intensifying competition, many other Chinese exporters are aggressively pivoting to exports, sending their cars to all corners of the globe, except the US, where tariffs make it unpalatable. China is now the world's biggest automobile exporter, surpassing Japan and Germany. 'Established automakers are voicing concerns about the impact of Chinese exports on their revenue streams,' Chris Liu, Shanghai-based senior analyst at Omdia, said. 'The pressure to protect local jobs, profit structures and budgets will only grow.' Many Chinese Cars Go to Middle East, Latin America The value of total exports nearly tripled to $37.3 billion in 2025 from 2022 The extent of this export surge is vividly illustrated by recent trade figures. During the first five months of 2025, Chinese car exports reached new peaks, with shipments to the United Arab Emirates alone totalling $2.7 billion, a 551% increase from 2022 and underscoring the Middle East's burgeoning demand for Chinese vehicles. Beyond the Gulf, a diverse array of nations is fuelling China's export boom. Mexico, a key player in the North American automotive landscape, imported $2.4 billion worth of cars while Russia, despite geopolitical complexities, remained a significant market, taking in $2.2 billion. Chinese automakers are now projected to capture 30% of global car sales by 2030, up from 21% in 2024, with the most substantial gains expected in emerging markets such as Southeast Asia, the Middle East and Africa, and South America, according to consultancy AlixPartners. But foreign markets aren't always a safe fallback. Geopolitical winds and upfront costs for setting up overseas sales may prevent weaker players from exporting, meaning 'only the stronger companies are able to,' AlixPartners' Shanghai-based Managing Director Stephen Dyer said, noting that the average capacity utilization rate for the top five Chinese exporters in 2024 was 57%, better than the overall industry. At home, the price war shows little sign of easing. BYD Is Leading the Price War Change in car prices among China's top 15 brands since 2023 Despite cementing its position as the world's highest-volume maker of pure battery cars and plug-in hybrids and selling around 4.3 million vehicles last year, BYD is spearheading multiple rounds of price cuts in a discounting war that started in China in early 2023. That's intensifying the battle for market share and making survival increasingly precarious for those smaller players that lack scale. Read more: China Vows to Address 'Irrational Competition' in EV Sector Shenzhen-based BYD has slashed prices on average by 32%, data compiled by the China Automotive Technology and Research Center show. Its ability to cut deep without unduly impacting its own finances stems from its extensive vertical integration — BYD makes its own batteries and chips and is therefore shielded from many supply chain snarls—and poses a formidable advantage, Bernstein analysts led by Eunice Lee said. Competitors attempting to replicate it will 'face a long and costly journey.' 'While technically capable of delivering higher short-term margins, management has opted for a more disciplined approach, balancing near-term profit with expansion,' Lee said. More broadly, analysts at HSBC Holdings Plc don't see any let up in the price war, particularly over the warmer months. 'As summer usually sees low seasonality, we expect the pricing environment is likely to remain under pressure, given lukewarm overall demand and consumption trading down,' they wrote in a June 19 note. 'The industry is currently deep in the process of consolidation and has yet to reach the inflection point.' In a notable divergence from the prevailing downward trend, some brands are holding sticker prices steady. Tesla models have even recorded a modest 3.8% price increase over the past two years. Meanwhile, the consolidation crunch may only just be beginning. Back in 2009, BYD stood tall as almost the only EV player of scale but by 2025, hundreds of players crowded the market. Intense Price War Pushes Carmakers to Consolidate As smaller players fold and competition intensifies, bigger brands are taking market share — but the consolidation has yet to peak Many startups have faltered within the last few years and the phase out of government subsidies in 2018 further tempered the influx of new entrants. However, despite these headwinds, fresh players continue to emerge, signalling that the market's anticipated consolidation is far from complete. As of May, BYD remained the undisputed leader, commanding around 27% of China's retail EV sector, but there are still about 120 other brands vying for 37% of the market. And the ultimate shakeout may take longer in China. For one, there's the involvement of local governments, which often prolong the operations of some carmakers, even though they may be running at very low production rates, because those companies were directly or indirectly backed by authorities. 'The consolidation has not yet truly begun,' said Dyer, noting that local automakers' impact on employment and car parts supply networks are both vital channels for economic growth. 'In the end, it will slowly consolidate because car making is a truly cash-burning business. We expect to see maybe a dozen survivors.' With assistance from Chunying Zhang, Jin Wu and Yasufumi Saito Edited by Katrina Nicholas and Yue Qiu More On Bloomberg
Yahoo
33 minutes ago
- Yahoo
Uranium Energy (UEC) Soars on 5th Day on Rosy Prospects From Energy Boom
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