An undated conceptual illustration of China’s technology aspirations.
Yaorusheng | Moment | Getty Images
China plans to increase its computing power by 50% by 2025, the country’s key ministries said Monday, as it looks to keep pace with the U.S. in artificial intelligence and supercomputing applications.
The world’s second-largest economy wants to have computing capacity equal to 300 exaflops, according to a plan from six government departments, including the powerful cyberspace regulator. That would be up from the 197 exaflop computing power the country currently has.
An exaflop, or EFLOP, refers to a unit of computing power. For context, one exaflop is equivalent to the computing power of two million mainstream laptop computers, according to Counterpoint Research.
The Chinese ministries said that the increased computing power will be required to support applications in industries including finance and education.
Expanding computing power is seen as key for supporting the development of artificial intelligence which requires advanced semiconductors to process huge amounts of data.
“China has found that traditionally, every 1 yuan invested in computing power has driven 3-4 yuan of economic output,” Akshara Bassi, senior research analyst at Counterpoint, told CNBC via email. “The investments echo China’s plans to drive economic output through leadership in technology prowess and integrating AI with existing technologies and solutions across all industries and domains.”
Technologies like semiconductors and AI have become key battlegrounds in the tech rivalry between the U.S. and China.
“China aims to invest in growing in its computing power especially the AI, as it sees its major cloud providers launching AI solutions en masse for consumers and enterprises,” Bassi said.
As part of its computing push, China wants to focus on areas such as memory storage and networks for transmitting data, and it is also planning to build more data centers.
The Chinese ministries said that the security of the supply chain will also be strengthened.
The country’s technology supply chain has been under pressure over the past few years as the U.S. has used export controls and other sanctions to attempt to cut the Asian nation off from key technologies like chips.
In response, China has sought to boost the capabilities of its homegrown industries in some of these areas.
Washington took note of a recent development in which Chinese tech champion Huawei released a new smartphone with a 5G chip — which was surprising as U.S. sanctions were designed to prevent this.
Counterpoint’s Bassi said that China’s ambitions to boost computing power could be held back by U.S. sanctions that restrict the country’s access to some critical semiconductors, such as the graphics processing units, or GPUs, sold by American chip designer Nvidia.
“Access to latest and best in class AI chips/GPUs is the primary obstacle that the country faces due to chip ban in expanding its AI data centers,” Bassi said.
Artificial intelligence robot looking at futuristic digital data display.
Yuichiro Chino | Moment | Getty Images
Artificial intelligence is projected to reach $4.8 trillion in market value by 2033, but the technology’s benefits remain highly concentrated, according to the U.N. Trade and Development agency.
In a report released on Thursday, UNCTAD said the AI market cap would roughly equate to the size of Germany’s economy, with the technology offering productivity gains and driving digital transformation.
However, the agency also raised concerns about automation and job displacement, warning that AI could affect 40% of jobs worldwide. On top of that, AI is not inherently inclusive, meaning the economic gains from the tech remain “highly concentrated,” the report added.
“The benefits of AI-driven automation often favour capital over labour, which could widen inequality and reduce the competitive advantage of low-cost labour in developing economies,” it said.
The potential for AI to cause unemployment and inequality is a long-standing concern, with the IMF making similar warnings over a year ago. In January, The World Economic Forum released findings that as many as 41% of employers were planning on downsizing their staff in areas where AI could replicate them.
However, the UNCTAD report also highlights inequalities between nations, with U.N. data showing that 40% of global corporate research and development spending in AI is concentrated among just 100 firms, mainly those in the U.S. and China.
Furthermore, it notes that leading tech giants, such as Apple, Nvidia and Microsoft — companies that stand to benefit from the AI boom — have a market value that rivals the gross domestic product of the entire African continent.
This AI dominance at national and corporate levels threatens to widen those technological divides, leaving many nations at risk of lagging behind, UNCTAD said. It noted that 118 countries — mostly in the Global South — are absent from major AI governance discussions.
UN recommendations
But AI is not just about job replacement, the report said, noting that it can also “create new industries and and empower workers” — provided there is adequate investment in reskilling and upskilling.
But in order for developing nations not to fall behind, they must “have a seat at the table” when it comes to AI regulation and ethical frameworks, it said.
In its report, UNCTAD makes a number of recommendations to the international community for driving inclusive growth. They include an AI public disclosure mechanism, shared AI infrastructure, the use of open-source AI models and initiatives to share AI knowledge and resources.
Open-source generally refers to software in which the source code is made freely available on the web for possible modification and redistribution.
“AI can be a catalyst for progress, innovation, and shared prosperity – but only if countries actively shape its trajectory,” the report concludes.
“Strategic investments, inclusive governance, and international cooperation are key to ensuring that AI benefits all, rather than reinforcing existing divides.”
Altimeter Capital CEO Brad Gerstner said Thursday that he’s moving out of the “bomb shelter” with Nvidia and into a position of safety, expecting that the chipmaker is positioned to withstand President Donald Trump’s widespread tariffs.
“The growth and the demand for GPUs is off the charts,” he told CNBC’s “Fast Money Halftime Report,” referring to Nvidia’s graphics processing units that are powering the artificial intelligence boom. He said investors just need to listen to commentary from OpenAI, Google and Elon Musk.
President Trump announced an expansive and aggressive “reciprocal tariff” policy in a ceremony at the White House on Wednesday. The plan established a 10% baseline tariff, though many countries like China, Vietnam and Taiwan are subject to steeper rates. The announcement sent stocks tumbling on Thursday, with the tech-heavy Nasdaq down more than 5%, headed for its worst day since 2022.
The big reason Nvidia may be better positioned to withstand Trump’s tariff hikes is because semiconductors are on the list of exceptions, which Gerstner called a “wise exception” due to the importance of AI.
Nvidia’s business has exploded since the release of OpenAI’s ChatGPT in 2022, and annual revenue has more than doubled in each of the past two fiscal years. After a massive rally, Nvidia’s stock price has dropped by more than 20% this year and was down almost 7% on Thursday.
Gerstner is concerned about the potential of a recession due to the tariffs, but is relatively bullish on Nvidia, and said the “negative impact from tariffs will be much less than in other areas.”
He said it’s key for the U.S. to stay competitive in AI. And while the company’s chips are designed domestically, they’re manufactured in Taiwan “because they can’t be fabricated in the U.S.” Higher tariffs would punish companies like Meta and Microsoft, he said.
“We’re in a global race in AI,” Gerstner said. “We can’t hamper our ability to win that race.”
YouTube on Thursday announced new video creation tools for Shorts, its short-form video feed that competes against TikTok.
The features come at a time when TikTok, which is owned by Chinese company ByteDance, is at risk of an effective ban in the U.S. if it’s not sold to an American owner by April 5.
Among the new tools is an updated video editor that allows creators to make precise adjustments and edits, a feature that automatically syncs video cuts to the beat of a song and AI stickers.
The creator tools will become available later this spring, said YouTube, which is owned by Google.
Along with the new features, YouTube last week said it was changing the way view counts are tabulated on Shorts. Under the new guidelines, Shorts views will count the number of times the video is played or replayed with no minimum watch time requirement.
Previously, views were only counted if a video was played for a certain number of seconds. This new tabulation method is similar to how views are counted on TikTok and Meta’s Reels, and will likely inflate view counts.
“We got this feedback from creators that this is what they wanted. It’s a way for them to better understand when their Shorts have been seen,” YouTube Chief Product Officer Johanna Voolich said in a YouTube video. “It’s useful for creators who post across multiple platforms.”