Despite the fact that this article is very well written and certainly contains high quality information, I choose to remain skeptical as it pertains to Nvidia's position in the market. I'll come right out and say that my experience likely makes me see this from a biased position.

The premise is simple: Business is warfare. Anything you can do to damage or slow down the market leader gives you more time to get caught up. FUD is a powerful force.

My bias comes from having been the subject of such attacks in my prior tech startup. Our technology was destroying the offerings of the market leading multi-billion-dollar global company that pretty much owned the sector. The natural processes of such a beast caused them not to be able to design their way out of a paper bag. We clearly had an advantage. The problem was that we did not have the deep pockets necessary to flood the market with it and take them out.

What did they do?

The started a FUD campaign.

They went to every single large customer and our resellers (this was a hardware/software product) a month or two before the two main industry tradeshows, and lied to them. They promised that they would show market-leading technology "in just a couple of months" and would add comments like "you might want to put your orders on hold until you see this". We had multi-million dollar orders held for months in anticipation of these product unveilings.

And, sure enough, they would announce the new products with a great marketing push at the next tradeshow. All demos were engineered and manipulated to deceive, all of them. Yet, the incredible power of throwing millions of dollars at this effort delivered what they needed, FUD.

The problem with new products is that it takes months for them to be properly validated. So, if the company that had frozen a $5MM order for our products decides to verify the claims of our competitor, it typically took around four months. In four months, they would discover that the new shiny object was shit and less stellar than what they were told. I other words, we won. Right?

No!

The mega-corp would then reassure them that they iterated vast improvements into the design and those would be presented --I kid you not-- at the next tradeshow. Spending millions of dollars they, at this point, denied us of millions of dollars of revenue for approximately one year. FUD, again.

The next tradeshow came and went and the same cycle repeats...it would take months for customers to realize the emperor had no clothes. It was brutal to be on the receiving end of this without the financial horsepower to be able to break through the FUD. It was a marketing arms race and we were unprepared to win it. In this context, the idea that a better mouse trap always wins is just laughable.

This did not end well. They were not going to survive another FUD cycle. Reality eventually comes into play. Except that, in this case, 2008 happened. The economic implosion caught us in serious financial peril due to the damage done by the FUD campaign. Ultimately, it was not survivable and I had to shut down the company.

It took this mega-corp another five years to finally deliver a product that approximated what we had and another five years after that to match and exceed it. I don't even want to imagine how many hundreds of millions they spent on this.

So, long way of saying: China wants to win. No company in China is independent from government forces. This is, without a doubt, a war for supremacy in the AI world. It is my opinion that, while the technology, as described, seems to make sense, it is highly likely that this is yet another form of a FUD campaign to gain time. If they can deny Nvidia (and others) the orders needed to maintain the current pace, they gain time to execute on a strategy that could give them the advantage.

Time will tell.