From the Wall Street Journal via MSN, November 24:
Sam Altman wants artificial intelligence to cure cancer. Elon Musk says AI robots will eliminate poverty.
China is focused on something more prosaic: making better washing machines.
While China’s long-term AI goals are no less ambitious than the U.S. tech titans, its near-term priority is to shore up its role as the world’s factory floor for decades to come. With exports under threat from rising costs at home and tariffs abroad, that is no longer assured.
The push can be seen across the giant country in scores of companies—fueled by billions of dollars in government and private technology development—that are transforming every step of making and exporting goods.
A clothing designer reports slashing the time it takes to make a sample by more than 70% with AI. Washing machines in China’s hinterland are being churned out under the command of an AI “factory brain.”
At one of China’s biggest ports, shipping containers whiz about on self-driving trucks with virtually no workers in sight, while the port’s scheduling is run by AI.
Executives involved in China’s efforts liken the future of factories to living organisms that can increasingly think and act for themselves, moving beyond the preprogrammed tasks at traditionally-automated factories. It could further enable the spread of “dark factories,” with operations so automated that work happens around the clock with the lights dimmed.
The advances can’t come quickly enough for Communist Party leaders, who fear China could lose its status as the world’s factory floor. Its population is shrinking, young people are avoiding factory jobs, and pushback against Chinese exports has intensified in many countries.
At the same time, President Trump is pledging to bring home vast numbers of manufacturing jobs through tariffs on China.
AI offers a lifeline to head off those risks, by helping China make and ship more stuff faster, cheaper and with fewer workers. Although some doubts are creeping in globally about how quickly AI will transform the world, China isn’t waiting: It wants to deploy what is available today quicker than the U.S. can, locking in any advantages.
“Only by proactively embracing change can we remain invincible in this revolution,” Hu Wangming, chairman of one of China’s largest steel groups, told state media this year. Its Shanghai-listed unit Baosteel had found 125 uses for AI by the end of last year—and is planning for 1,000.....
....Huawei’s role
Alongside DeepSeek, U.S.-sanctioned technology giant Huawei is at the center of China’s efforts. The company has rolled out a family of large language models, dubbed Pangu, after a character from Chinese mythology in the creation of the world, along with other AI services factories can use to become more dynamic.
Huawei’s engineers have been embedded with Conch Group, a giant cement producer in the city of Wuhu, around 200 miles west of Shanghai, whose cement has been used in projects such as the Three Gorges Dam and Dubai’s Burj Khalifa skyscraper.
Facing a glut of cement production in China, Conch wants a leg up on its rivals by adopting AI quickly, including in the production of clinker, a key cement ingredient made by heating limestone and other raw materials at high temperatures.
Conch and Huawei have developed AI tools for more precisely predicting clinker strength, as well as for controlling energy use at the kiln where it is made. Miles of conveyor belts in Wuhu are now being monitored by AI, helping Conch respond more efficiently when they break.
On a recent visit, workers at Conch’s sprawling clinker facility monitored the AI model as it automatically adjusted production in real time. Conch and Huawei say that with AI they are now able to predict clinker strength with more than 85% accuracy, compared with 70% through manual estimation, allowing them to adjust raw material ratios and avoid producing clinker of unsuitable strength....
....MUCH MORE
What is happening with AI in China is exactly the path that nanotechnology followed. A vignette from a January 2019 post, "Whatever Happened to Nanotechnology? The Same Thing That Is Happening to Tech Right Now":
a December 2010 post:
"Top Investment Trends For Futurists" (PXN; TINY)
...The reason for highlighting nano is two-fold.
1) Since Feynman coined the word there has been a misconception among investors that there would be a nano-technology "industry". This has proven not to be the case and won't be in the future. Rather nano is a tool, an approach toward problem solving.
There will be some breakthroughs that make their discoverers instantly (after 10 years of research) wealthy but the real beneficiaries will be companies like Kyocera and 3M and Siemens. They will use the technology to do what they are already doing, just better, faster, cheaper, more.
2) In spite of the fact that there will be few pure plays we are convinced that nano combined with advances in materials science and manufacturing technology is what will spur the next secular bull market....
When it becomes ubiquitous, the distinctions blur, the drive for creativity recedes, stasis, then death.
Wait what? Entropy! I meant to co-opt the physically precise concept of entropy to metaphorically describe the trend. Not death.
No, death bad, Sand Hill Road good....
And AI?
I sometimes forget that normal people haven't been obsessing about this stuff for going on a decade. As just one example, out of hundreds of posts on NVDA, is a conclusion we reached early on, still hold, and tried to express in the introduction to a 2020 IBD story:
Investor's Business Daily on Artificial Intelligence Stocks
There is a definitional problem with the term "AI stocks [or companies]" in that AI is a tool. Much as the (over) hyped nanotechnology revolution didn't produce "nanotech stocks" but instead became incorporated into processes and procedures that give companies employing same an incremental edge rather than epochal shifts.*
However, if there is an AI "company" Nvidia would deserve the moniker as much as anyone....
Last seen in September 2024's "How Nvidia Is Building A Competitive Moat To Fend Off AI Challengers" (NVDA).
And Huawei? They are the people keeping Nvidia's Jensen Huang up at night, not the TPU folks at Google. If interested see:
"Huawei Plans Three-Year Campaign to Overtake Nvidia in AI Chips"
This is the one Nvidia's Jensen Huang thinks about
As noted earlier this year:
What Huawei has accomplished is astounding and borderline terrifying.
During the mid-to-late twenty-teens the world began to notice that the company was a serious business competitor and an extension of China's Communist Party and government.
In an attempt to assuage these concerns one of their Western honchos said:
‘At Huawei, we’re not attaching laser beams to the heads of sharks’—Alykhan Velshi, Vice President, Corporate Affairs, Huawei Technologies Canada, Markham, Ont.Letter to the Editor, Maclean's Magazine, published July 23, 2019That was in one of our posts on China's security laws which require Chinese (and foreign-domiciled!!) companies to work with the authorities when asked. I'm not sure the statement did much assuaging....
From The Register, September 18:
On the same day that fellow Chinese giant Tencent says its overseas cloud clientele doubled
Chinese tech giant Huawei has kicked off its annual “Connect” conference by laying out a plan to deliver increasingly powerful AI processors that look to have enough power that Middle Kingdom users won’t need to try getting Nvidia parts across the border.
Huawei already offers the Ascend 910C accelerator that Chinese AI upstart DeepSeek is thought to have used to develop its impressively efficient models. At Connect today, Huawei promised four successors.
First off the rank, in the first quarter of 2026, will be the Ascend 950PR which, according to slideware shown at the conference, will boast one petaflop performance with the 8-bit floating-point (FP8) computation units used for many AI inferencing workloads. The chip will also include 2 TB/s interconnect bandwidth and 128GB of 1.6 TB/s memory. In 2026’s final quarter Huawei plans to deliver the 950DT, which will be capable of two petaflops of FP4 performance thanks to the inclusion of 144GB of 4 TB/s memory.
In 2027, Huawei plans the Ascend 960 that will include 288GB of 9.6TB/s memory. 2028 will see the debut of the Ascend 970, in which memory will speed along at 14.4 TB/s.
Those memory speeds suggest Huawei has created its own high-bandwidth memory, or sourced some from within China, and is confident enough to include it on a multi-year roadmap....
....MUCH MORE
If interested the introduction was part of the outro from "The Secret History of China’s Most Powerful Company".
Some of our previous posts on the Chinese colossus:
- As Huawei CFO Offers Husband, Children For Bail Collateral, Some Background
- Huawei Says Cell Phone Sales In China Just Fine, Thanks For Asking
- "The Register paid a visit to Huawei's HQ in Dongguan, China"
- "View from Washington: How do you solve a problem like Huawei?"
- By 2020 it was "The Chip Wars of the 21st Century":
While some people are bleating and tweeting into the ether about their political feelings, others are creating the technical container that will define, delineate, create, and constrict the future. Them's the ones to watch out for.
Baaaa
- "Huawei Revs Up Intelligent Driving Push With Software Launch"
- "China’s Huawei has big ambitions to weaken the US grip on AI leadership"
- How Huawei Took Over the World
- "China denies report it spies on Trump’s iPhone, suggests he get a Huawei instead"
- Chips: "Huawei building vast chip equipment R&D center in Shanghai"
At the moment I don't think ASML has to worry but U.S. policymakers should be dusting off their contingency plans. They have contingency plans, right? I think they're in the same drawer as the CDC's pandemic response folder....
And many, many more. Quite an amazing story.
And not afraid to get their hands dirty when the survival of the company was a talking point in 2021: Huawei Seeks Other Revenue Streams Including Coal Mining and Pig Farming
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