LLMs and a chipmaking boom: Here's what Xi Jinping said about China's AI wins in his New Year's address

In his New Year's address delivered on Wednesday, Chinese President Xi Jinping celebrated the significant advancements his country has made in artificial intelligence and technology throughout 2025. He emphasized that China has successfully integrated science and technology into various industries, leading to a series of groundbreaking innovations. Xi pointed out that numerous large AI models have been in fierce competition, leading to notable breakthroughs in domestic chip development. "This progress has positioned China as one of the economies with the highest innovation capabilities," he stated during his speech in Beijing. Beyond AI, Xi also mentioned China's Tianwen-2 mission, which focuses on asteroid sampling, and the nation’s latest aircraft carrier equipped with an advanced electromagnetic catapult system. He highlighted the construction of the world's largest dam in Tibetan territory and advancements in humanoid robotics and drone technology. The remarks come after a year where China closely matched the U.S. in AI developments. The year kicked off with the launch of the R1 AI model by China's Deepseek startup in January, a significant competitor to OpenAI's offerings, which had a notable impact on U.S. tech stock valuations. Nvidia, a leading name in AI hardware, experienced a stock decline of over 17% in late January, resulting in substantial losses. The U.S. export restrictions on advanced AI chips have inadvertently benefitted China's domestic chip manufacturers, elevating industry leaders like Chen Weiliang of MetaX Integrated Circuits Shanghai to billionaire status. However, the tech landscape remains dynamic, with President Trump granting Nvidia permission in December to supply its H200 chips to selected clients in China. Additionally, Meta's recent announcement of its acquisition of the AI startup Manusin, valued at over $2 billion, marks one of the largest U.S. tech acquisitions of an Asian AI firm. Investors are keenly observing these developments, with UBS wealth management executive Jason Draho suggesting that Chinese AI stocks could serve as a strategic counterbalance to U.S. tech equities.