China’s increasing clout in the global semiconductor supply chain is accelerating the unravelling of the artificial-intelligence trade, as expectations grow that the Asian nation will challenge foreign tech juggernauts by supplying the world with cheaper alternative products. “The message for global investors is that AI is becoming a two-sided trade,” said Gary Dugan, CEO of The Global CIO Office. “US platforms and chip leaders still command the earnings pool, but China is creating investible competitors that can compress future margins and alter supply-chain assumptions.” Adding to those worries, China is also closing its gap with the US in AI model development. Kimi K3, the 2.8-trillion-parameter open-weight model recently released by start-up Moonshot AI, almost matches the most sophisticated models from OpenAI and Anthropic in performance.