Huawei just rewrote the rules of chipmaking. Can U.S really stop China’s AI takeover?

Huawei has achieved a breakthrough in building advanced chips in half a decade. The company announced a new technology called LogicFolding, which will allow them to stack computer circuits on top of each other.

This technology will save them from the need to buy machines to make the chips smaller. He Tingbo, who leads Huawei’s chip division, said at a tech conference in Shanghai on Monday that the new 3D design will make their chip reach the performance levels of the best chips in the world.

Washington and Beijing are fighting for control over artificial intelligence. American sanctions have stopped Huawei from getting the tiny chips that power phones, cars, and computers.

The U.S. has also blocked China from buying the software and equipment needed to make these chips. Beijing has spent billions building its own supply chain.

Huawei says its chips will match 1.4-nanometer technology by 2031. Right now, China can only make 7-nanometer chips. TSMC in Taiwan makes chips for Nvidia. It already uses 2-nanometer technology and expects to start making 1.4-nanometer chips in 2028.

China breaks from Moore’s Law with new chip design

The company is also replacing Moore’s Law with Tau Scaling Law. Moore’s law has been employed in the industry by making the transistors smaller. The Tau Scaling Law focuses on the speed of data transfer of the stacked chips.

“The industry will face these problems sooner or later,” He told reporters after her speech. “We have confidence in this path because we have practice as proof.”

People in the Chinese tech industry call her the “chip queen.”

However, the company still has some hurdles. The big challenge is to keep stacked chips from overheating, which current tools can’t protect against.

Costs, power use, heat, and putting everything together are already major hurdles for Chinese technology, according to Brady Wang from Counterpoint Research.

Still on Weibo, Huawei’s breakthrough is being hyped as what DeepSeek offered. Lower costs for the American standard technology. Some are even saying that U.S sanctions have pushed China into “survival mode,” which needed faster innovation.

Huawei also bounced back in 2023 with new phones that had surprisingly good Chinese-made 5G chips. American restrictions are an actual hurdle.

Nvidia CEO Jensen Huang went to China this month with President Donald Trump for talks with Chinese leader Xi Jinping. He told CNBC his company has “largely conceded” the Chinese chip market to Huawei. But he also said China is part of a $200 billion market for Nvidia’s new processors, as reported by Cryptopolitan previously.

American chipmakers bet big on new markets

AMD is putting $10 billion into building infrastructure. Nvidia is changing its business strategy to focus on enterprise customers instead of just big cloud companies. Both moves show American chipmakers are shifting away from China.

A new analysis from Anthropic warns that the next two years will decide whether democratic countries or authoritarian governments control the future of artificial intelligence.

Anthropic is an AI company. The report says democracies now lead in “compute,” which means the advanced chips needed to build the best AI systems. This lead exists because of American innovation and export controls.

But Chinese labs are staying close by, exploiting gaps in U.S. rules. They smuggle chips into China. They use American chips in data centers outside China. They run what Anthropic calls “distillation attacks.” These attacks involve creating fake accounts to copy American AI models. This steals decades of research and billions in investment.

Anthropic describes two possible futures for 2028. In the first, democracies close these loopholes and build a lead of 12 to 24 months in AI capabilities. In the second, China keeps finding ways around the rules and catches up. It then uses AI to expand surveillance and control.

The report says Firefox fixed more security problems last month using Anthropic’s new AI model than it did in all of 2025. A Chinese cybersecurity expert wrote that while China is “still sharpening our swords,” America has “suddenly mounted a fully automatic Gatling gun.”

Chinese state media said after Huawei’s announcement that competition should be “moderate and healthy.” It should help both sides advance. A Foreign Ministry spokesman said Trump and Xi agreed to start government talks on AI during their recent meeting in Beijing.

Anthropic says the decisions policymakers make this year will determine who controls transformative AI technology. It will also determine whether it serves democratic values or enables authoritarianism worldwide.

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