China's AI and Chip Advancements Intensify US-China Tech Rivalry, Triggering Global Market Volatility

Key Intelligence

• ■China has reportedly achieved a breakthrough in DUV lithography, enabling domestic chip production and challenging US dominance, leading to a significant sell-off in global tech stocks.
• ■Chinese AI models are rapidly advancing, with domestic Large Language Models (LLMs) now accounting for two-thirds of global call volume and a specific model (Xiaomi MiMo-V2.5) leading in worldwide token usage.
• ■The US and China are engaged in an escalating 'AI cold war,' characterized by mutual accusations of intellectual property theft, threats of sanctions, and ongoing disputes over tariffs and technology restrictions.
• ■Despite significant technological progress, Chinese AI companies are reportedly struggling to achieve profitability, while US firms face accusations from Beijing of training AI models using Chinese data.
• ■Geopolitical tensions are further highlighted by US probes into Chinese factories in Vietnam, new tariff fears, and the detention of an Nvidia employee in Taiwan over a chip smuggling investigation.