Huawei Founder Ren Zhengfei: AI Competition Is About Applications, China to Achieve Remarkable Progress Within 5 Years

As competition for artificial intelligence dominance between the United States and China intensifies, China is closely catching up with the U.S. by delivering tangible results across the technology sector. Some analysts note that unlike the U.S., China faces minimal circular transaction risks, limiting potential damage from the AI bubble concerns that have recently emerged.

Ren Zhengfei, founder of Huawei, emphasized China's superiority in AI applications at a recent symposium held during the International Collegiate Programming Contest (ICPC), according to China's Yicai Global and other media outlets on Wednesday.

"When discussing the current AI boom, we should focus on 'applications' rather than 'inventions,'" Ren said. "AI invention can lead a single IT company to success, but applications can strengthen an entire nation."

Ren stated that Huawei's AI research is entirely focused on applications. He also emphasized that the U.S. and China are pursuing different directions in AI development. While the U.S. concentrates on artificial general intelligence (AGI) and artificial superintelligence (ASI) research, China is studying how to create more value and solve development challenges, he explained.

"Within three to five years, or even five to ten years, China will achieve remarkable progress," Ren said.

Meanwhile, claims have emerged that China has achieved performance comparable to Nvidia's AI chips using older-generation semiconductors. The strategy of offsetting individual chip performance disadvantages through a "volume offensive" connecting multiple chips is reportedly gaining momentum.

Wei Shaojun, vice chairman of the China Semiconductor Industry Association and a professor at Tsinghua University, recently unveiled an AI chip designed using older semiconductors, claiming it "delivers performance comparable to Nvidia's latest 4-nanometer chips."

Chinese domestic semiconductor companies are also producing visible results and expanding the market. Cambricon announced plans to more than triple its AI semiconductor production next year. Moore Threads, founded by former Nvidia employees, surged six-fold immediately after its listing on the 5th, amid assessments that the company has accelerated GPU localization in China.

Meanwhile, as AI bubble concerns triggered by circular transaction controversies in the U.S. show no signs of subsiding, analysis suggests that China faces lower bubble risks compared to the U.S.

A China AI insight report published by UBS Securities projected that AI bubble risks in China are low due to limited domestic revolving financing and relatively cautious capital expenditure. Unlike their U.S. counterparts, Chinese AI developers fund operations through their parent companies' own cash rather than third-party financing, according to the report.

This year, total capital expenditure by major Chinese internet companies stood at approximately 400 billion yuan ($55 billion), just one-tenth the level of U.S. companies.