In recent times, Beijing has taken steps to curtail the sharing of corporate information. This move not only complicates international business relations but also disrupts China’s pursuit to build AI Chips.
Beijing’s Increased Control
Over the past few months, Chinese authorities have been tightening their grip on the flow of corporate data. Prominent international consulting firms like Bain & Co have been raided. Along with this, the Beijing office of Mintz Group, an American corporate investigations firm, witnessed detention of some of its employees. This aggressive approach is part of a broader crackdown on information sharing, which is legally and commercially vital in the West.
Consequences for Multinational Businesses
These sudden moves have sent a chill through foreign firms with offices in China. Chinese financial data providers have also stopped allowing overseas access to their databases. Coupled with the country’s top legislative body revising the anti-espionage law, the power of authorities to respond has increased considerably. All these changes could potentially be disruptive for multinational businesses.
Impact on the Development of AI Chips in China
Under Xi Jinping’s leadership, public discourse in China has been shrinking steadily, with economic and financial speech now also being curtailed. This is not only affecting multinational businesses but also hinders the development of AI Chips in China.
It’s worth noting that research in the US has revealed how China is trying to obtain new technologies for both military and civilian use. This includes the procurement of high-end semiconductors necessary for various applications, including AI, despite the US’s decision to exclude China from the global market for these chips.
However, it’s uncertain whether China’s decision to sharply curtail sources of information is an attempt to cover its tracks or a broader strategy. Despite the costs, it’s clear that the combination of data opacity and lavish government funding has had limited success in advancing China’s chip industry. In fact, it has reportedly led to significant corruption.
As we move forward, it’s essential to note that the increased difficulty in finding and sharing information about these companies won’t fix the situation but could potentially make it worse. The future of AI Chips in China in the context of this data lockdown remains uncertain.
