Wouldn’t China have seen the writing on the wall years ago?

Noone wants to spend tens of billions of dollars if they dont have to. Eventually, in the last 5-10 years, it became an absolute necessity for China, so they had no choice but to do it. In comparison, the West is still manufacturing most of its stuff in China because it is cheaper and it would be pretty expensive(and time consuming) to move all that manufacturing to EU/US. And most of that manufacturing is infinitely simpler than cutting edge microchips.

Hell, nvidia(an american company) is literally trying to “bypass” sanctions and sell their 4090 gpus in China. Once those sanctions were announced, their stock fell. And then nvidia made a “crippled” 4090, that in theory wasnt as capable in terms of AI calculations. But the US is still saying “are you fucking kidding me? no means no”.

In return, China is buying all 4090 graphic cards they can get in their hands, even older generation cards. If you are wondering why a 2000€ card is even more expensive now than it was a year ago. Of course thats how sanctions work in a capitalistic society, you can only increase the cost of doing business, not actually prevent someone from getting stuff.

It’s the same thing with Russia. You can ban Russia from buying stuff but then a random armenian or turkish or cypriot company can buy that stuff and secretly ship them to Russia.

Capitalism has created significant strategic weaknesses for all sides. Thats why the West is losing its mind with batteries and rare earth minerals. It isnt that we cant make batteries or mine rare earth minerals(they arent that rare), it’s that we have relied on China and now we need to start doing the work for ourselves(with increased monetary and potential environmental cost). It will take money and time but eventually we will get there.

is it too hard to believe that China, and maybe others have done the same and have been able to keep it a secret as well

This kind of technology is about the capability to mass produce cutting edge chips, in order to use it for AI, phones, missiles, etc. There is little reason to be able to do that and keep it a secret. This is a very iterative heavy technology, you start from something and you keep improving it, it isnt like nukes(you either have it or dont).

In fact, China is already making graphic cards for AI(and technically gaming). And they are absolutely terrible in terms of performance and power efficiency. But at least they are “homemade”(with tons of IP stolen from nvidia, etc). That is very impressive.