China’s leading tech firms, including Alibaba, Tencent, and Baidu, are shifting their AI development to domestically produced chips due to dwindling Nvidia processor supplies and stricter US export controls. This transition is urgent as their existing Nvidia stock is expected to last only until early next year, prompting exploration of alternative semiconductors, particularly Huawei’s Ascend chips. Despite the challenges of migrating systems and high costs, companies are considering a hybrid approach, using existing Nvidia chips for training while integrating local processors for growing inference needs.