China Tech Week: Domestic innovations challenge US dominance

This has truly been China Tech Week, marking technological milestones for the nation's tech industry.

Xiaomi unveiled its self-developed chip, while Huawei launched computers powered by its in-house developed operating system. Crucially, these companies, leveraging their established fame and vast user bases, are poised to ensure the rapid commercial deployment of these breakthroughs in chip and operating systems.

These advancements, coupled with the rising prominence of the DeepSeek AI model since early 2025, directly challenge the long-standing dominance of US tech firms across key sectors: from the Windows-Intel duopoly in computing, to Qualcomm in the mobile chip realm, and established leaders like OpenAI and Nvidia in the artificial intelligence domain.

As Xiaomi CEO Lei Jun aptly stated during a conference on Thursday night: "Winners can't win always. There is always a chance for those who come later, if they have decisions and preparation for struggle."

Lei's remarks came as he compared Xiaomi's new in-house chip with Apple's, and announced a plan to invest 200 billion yuan (US$27.8 billion) in key-technology R&D over the next five years.

Analysts suggest this trend holds particular strategic importance amidst the strained US-China relationship and rigorous US technology export controls, demonstrating China's accelerated drive towards technological self-reliance.

Xiaomi's Strategic SoC Chip

Xiaomi's strategic pivot into in-house chip development reached a major milestone with the official release of its first self-developed 3-nanometer mobile SoC (system on chip) chip, the Xring O1, in Beijing on Thursday evening.

The chip, boasting a 10-core CPU and a 16-core GPU, is designed to deliver an improved user experience and has already entered mass production, powering the new flagship products: the Xiaomi 15S Pro smartphone and the Xiaomi Pad 7 Ultra tablet.

While representing a significant investment and complex undertaking, this shift offers considerable advantages for smartphone manufacturers. By controlling the research and manufacturing processes, companies can enhance and customize performance, better manage costs, and gain greater control over product release timelines – all crucial aspects in China's intensely competitive market.

For years, Xiaomi and other Chinese mainland Android phone makers have primarily relied on SoC chips from US-based Qualcomm and Taiwan-based MediaTek. Xiaomi is now poised to join an "elite club" alongside Apple, Huawei, and Samsung in developing its own smartphone chips.

Given Xiaomi's substantial global user base, which ranks third in the worldwide smartphone market, as approximately 14 percent behind Apple and Samsung, according to Counterpoint, the Xring O1 chip is expected to see rapid adoption in the mass market, ensuring swift commercial utilization of this breakthrough.

Huawei's Computer with In-House System

On Monday, Huawei unveiled a foldable PC, notable not only for its sleek design but, more significantly, for being powered by its in-house developed operating system HarmonyOS.

This launch marks a substantial stride in China's push for technological self-reliance, directly challenging the decades-long dominance of the Windows-Intel ecosystem in the global computing market. The move offers consumers and enterprises an alternative aiming to reduce reliance on foreign technology.

Initial market feedback indicates a generally positive reception.

Huawei's new PCs are particularly appealing to segments prioritizing data security and national technology. For corporate and government clients in China, the shift towards domestically developed systems provides a compelling proposition amidst ongoing geopolitical uncertainties.

Many consumers and industry officials perceive this as a natural "defensive move" for Huawei, given the strict tech export restrictions it faces. Others as an "aggressive moment" for the company and a whole domestic industry chain.

Huawei is creating a new, integrated ecosystem spanning PCs, mobile devices, and even in-vehicle applications, ultimately aiming to replace both Windows and Android systems.

Leveraging its strong telecommunications background and recent success in surpassing Apple's iPhone sales in China, Huawei's HarmonyOS is designed to "connect all devices," a vision already extending to products from overseas brands such as Canon printers and Volkswagen cars.

The ultimate success of this ambitious endeavor will depend on widespread developer adoption and the ability to consistently deliver a seamless user experience that matches, or even surpasses, its Western counterparts.

Challenging Decades of US Tech Hegemony

For decades, the global technology landscape has been largely defined by the formidable dominance of US tech firms. In the computing arena, the Windows-Intel duopoly reigned supreme, with Microsoft's operating system and Intel's processors forming the foundational architecture for the vast majority of personal computers worldwide.

Similarly, in the burgeoning mobile chip realm, Qualcomm established an unparalleled leadership, powering a major proportion of the world's smartphones with its Snapdragon processors and extensive patent portfolio. Its technologies became indispensable, often acting as a gatekeeper for mobile innovation.

However, the high and complex patent fees imposed by Qualcomm have historically exerted pressure on Chinese phone makers. This culminated in 2015 when Qualcomm paid a record US$975 million fine in China, concluding a 14-month government investigation into anti-competitive practices.

More recently, American companies such as OpenAI (invested by Microsoft), along with Google and Meta, have emerged as pioneers in large language models. Concurrently, Nvidia's specialized GPUs have become the de facto standard for AI training and development. It is important to note that most advanced Nvidia products, especially those crucial for AI training and reasoning, are currently restricted from being sold in the Chinese mainland due to export controls.

Booming China Tech Sector

Despite these formidable challenges, China's indigenous tech sector is demonstrating robust growth and innovation.

The emergence of homegrown AI models like DeepSeek, which has quickly become a trendsetter, exemplifies this shift. Even Nvidia CEO Jensen Huang publicly acknowledged DeepSeek's significant contributions to the industry during his recent visit to Taiwan, further noting that US export controls on artificial intelligence chips to China had inadvertently spurred the use of locally developed cutting-edge technology.

While US firms have undeniably shaped global digital infrastructure in recent decades, their established positions also inadvertently created formidable barriers to entry for aspiring competitors worldwide.

Beyond the headline-grabbing efforts of DeepSeek, Huawei, and Xiaomi, the broader Chinese tech industry is attracting global attention and capital. This interest extends to burgeoning market segments such as humanoid robotics, drones, the low-altitude economy, and brain-computer interface technologies.

Reinforcing this positive sentiment, JP Morgan recently upgraded its rating on emerging market equities to "overweight" from "neutral," citing easing US-China trade tensions and a softer dollar.

The investment bank is increasingly bullish on China's tech shares. While profits from major companies such as Tencent and Alibaba have yet to ignite broad investor optimism, it is believed the recent weakness could be an opportunity, especially for investors looking to continue diversifying away from crowded US tech positions, JP Morgan stated in a recent research note.