[FooBarWidget]

What does "are not good after all" even mean? I feel there are too many value judgements in that question's tone, that blindsides western observers. I feel like the tone has the hidden implication of "this must be fake after all, they're only good at faking/stealing, nothing to see here move along".

Are they as good as Nvidia? No. News reporters have a tendency to hype things up beyond reality. No surprises there.

Are they useless garbage? No.

Can the quality issues be overcome with time and R&D? Yes.

Is being "worse" a necessary interim step to become "good"? Yes.

Are they motivated to become "good"? Yes.

Do they have a market that is willing to wait for them to become "good"? Also yes. It used to be no, but the US created this market for them.

Also, comparing Chinese AI chips to Nvidia is a bit like comparing AWS with Azure. Overcoming compatibility problems is not trivial, you can't just lift and shift your workload to another public cloud, you are best off redesigning your entire infra for the capabilities of the target cloud.

[rich_sasha]

I think my question made it clear I'm not simply assuming China is somehow cheating here - either in the specs of their current product, or in stealing IP.

No, I just struggle to reconcile (but many answers here go some way to clarifying) Nvidia being the pinnacle of the R&D-driven tech industry - not according to me but to global investors - and China catching up seemingly easily.

[FooBarWidget]

Unfortunately I think global investors are quite dumb. For example all the market analysts were very positive about ASML, Nvidia, etc but they all assumed sales to China would continue according to projections that don't take US sanctions or Chinese competition into account. Every time a sanction landed or a Chinese competitor made major step forward, it was surprise pikachu, even though enthusiasts who follow news on this topic saw it coming years ago.

[gchadwick]

To me at least "not good after all" means their current latest hardware has issues which means it cannot replace Nvidia GPUs yet. This is a hard problem so not getting there yet doesn't imply bad engineering just a reflection of the scale of the challenge! It also doesn't imply that if this generation is a miss following generations couldn't be large win. Indeed I think it would be very foolish to assume that Alibaba or other Chinese firms cannot build devices that can challenge Nvidia here on the basis of current generation not being up to it yet. As you say they have a large market that's willing to wait for them to become good.

Plus it may not be true, this new Alibaba chip could turn out to be brilliant.