They're already capable to build microprocessors completely in-house. This is precisely the cutting edge we're talking about.
This matters for AI datacenters in particular, if they want to be autonomous in building them they need to be able to build advanced microprocessors locally.
Despite rumours to the contrary the world does need things that aren't useful for modern AI codebases still, I'd really appreciate it right now if China could get some fabs going that just manufactured RAM, storage, and maybe a selection of chips that the big ones have given up on because its more profitable to endlessly churn out GPUs and NPUs.
Constant blaming and framing others of stealing. State support, unfair practices etc is not gonna help you become successful. China is now part of the game. You better work with them.
This matters for AI datacenters in particular, if they want to be autonomous in building them they need to be able to build advanced microprocessors locally.