First Time in 30 Years the US is Ahead of China in Tech Says Ives

Dan Ives, Global Head of Technology Research at Wedbush Securities joins Bloomberg Intelligence to discuss the latest in the tech industry.

OpenAI is in initial discussions to raise at least $10 billion from Amazon.com Inc. and use its chips, a potential win for the online retailer’s effort to broaden its AI industry presence and compete with Nvidia Corp. Blue Owl Capital will not back a $10 billion deal for Oracle’s next data center after negotiations stalled, according to a report by the Financial Times

The trade talks showed just how much leverage China has over the US. This is largely thanks to its near-total domination of the supply chain for rare earth minerals, which are essential for building powerful magnets, coloring smartphone screens and boosting digital signals, among thousands of use cases. Beijing’s restrictions on export of the minerals threaten a host of US industries, including EVs, satellites, aviation and consumer electronics. The US is investing to develop domestic capacity in rare earth mining and processing, but “these changes will take years to fully remedy the current overdependence on China,” says Daniel Rosen, co-founder of the economic research firm Rhodium Group.

The US also relies on China for ingredients in nearly 700 medicines—a dependency so sensitive that China’s negotiators didn’t even bring it up in the recent trade talks. And the decision by China in October to cut off exports of computer chips made by Chinese-owned Nexperia, leading to production slowdowns for carmakers including Japan’s Honda and Nissan, shows just how much disruption it can cause when it wants to.

Of course, the US has choke points of its own, primarily in that it’s the leading supplier of the microprocessors used to train artificial intelligence models. Trump has forbidden Nvidia Corp. from selling its highest-end chip, known as Blackwell, to China. But Hongbin Li, co-director of the Stanford Center on China’s Economy and Institutions, argues that Beijing has the upper hand. “Can we live without medicine, without rare earths? No,” he says. “Can the Chinese live without Nvidia chips? Yes, they can.” (Li emphasized that, overall, trade is mutually beneficial.)

China has also shown an ability to get around US export controls. Some Chinese companies rely on smuggling networks to get their hands on microprocessors, while others set up shell companies to purchase chips directly from manufacturers. Giants such as Huawei Technologies Co. are also working on producing their own chips that, while not quite state-of-the-art, will still enable competitive products.

In clean energy, China is running laps around the rest of the world, building twice as much solar power capacity as the US and Europe combined. The country dominates the global EV market, producing 70% of the world’s electric cars. It’s the leader in battery technology too: At this year’s Shanghai auto show, carmaker BYD Co. demonstrated a battery that charges most of the way in five minutes. In 2024, China installed more factory robots than the rest of the world combined. Shenzhen-based DJI sells 70% of commercial drones for consumers and businesses, and the US lags China in military drone technology as well.

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