China's Advances in AI and Chipmaking: Highlights from Xi Jinping's New Year Speech

In his recent New Year's message from Beijing, Chinese President Xi Jinping expressed his satisfaction with China's position in the global AI race.

Technological Integration and Innovation

During his Wednesday speech, Xi extolled China's technological advancements in 2025. He emphasized the country's success in merging science and technology with industrial applications, leading to a flurry of innovations.

Significant progress has been made in AI, with several major models striving for supremacy. Notably, China has achieved substantial breakthroughs in creating its own microchips, a development Xi credits with elevating the nation into a world leader in innovation growth.

Beyond AI: Other Key Achievements

Besides AI, Xi highlighted other milestones such as the Tianwen-2 mission for asteroid sampling, and the launch of an aircraft carrier equipped with an advanced electromagnetic catapult system.

Xi also brought attention to infrastructure projects like the inception of what will be the world's largest dam in Tibet, as well as strides in humanoid robots and drone technology.

Rivalry with the U.S. in AI

Reflecting on 2025, Xi noted a year marked by fierce competition with the United States in AI development.

The year began with a prominent Chinese AI firm debuting its R1 model, which posed a substantial challenge to OpenAI's o1. This development significantly impacted U.S. tech stocks, causing a steep drop in Nvidia's stock value in late January.

Impacts of U.S. Policies on AI Chips

U.S. restrictions on AI chip exports inadvertently fueled the rise of Chinese chipmakers, with entrepreneurs like Chen Weiliang of MetaX Integrated Circuits becoming billionaires as a result.

In December, however, a policy shift allowed Nvidia to sell its H200 chips to certain customers in China, a notable exception in the ongoing trade tensions.

Major Deals and Market Impact

Further highlighting the interconnected nature of tech economies, Meta announced its acquisition of the Chinese AI startup Manus for over $2 billion—an historic deal emphasizing the value and potential of Asian AI enterprises.

Drawing investment interest, Jason Draho from UBS suggested in November that investors explore Chinese AI stocks as a viable option to diversify away from American tech stocks.