Carvina Capital Pte. Ltd. assesses that China’s artificial intelligence build-out continues to expand under tightened United States export controls, with procurement policies, state financing and corporate engineering programmes recalibrating where and how compute power is sourced. The consequence for investors is a clearer split in standards, software and supply chains that now functions as two partially parallel systems.
In the current fiscal period, legislative and regulatory actions in Washington require leading chipmakers to prioritise domestic customers, which constrains Chinese access to high-end accelerators over the current fiscal period. Beijing’s response centres on scale and substitution. The third National IC Industry Investment Fund allocates an estimated USD 47.3 billion in the current cycle, while a state-backed vehicle established in May 2025 deploys a further USD 49.4 billion to accelerate foundry upgrades, packaging and design tools. Government procurement guidance reinforces that publicly owned computing facilities source a majority of components from domestic producers in the present planning window.
In practice for the current planning window, corporate strategies adjust accordingly. Huawei targets a doubling of Ascend 910C output over the next twelve months, with broader Ascend volumes forecast through 2026. Alibaba introduces domestically manufactured processors that early technical assessments describe as competitive with leading United States parts for inference while improving power draw, and Tencent aligns software stacks to run efficiently on locally produced units. Secondary suppliers broaden the menu of options; MetaX unveils processors positioned for memory-intensive workloads, albeit with higher energy consumption in current tests.
Across listed markets, equity markets register the shift. Cambricon’s market value rises significantly, with the share price doubling this year and advancing by more than 500% over the preceding twelve-month period, while the trailing earnings multiple moves above 500 against a figure near 50 for Nvidia over the same period. The valuation gap, Peter Jacobs, Director of Private Equity at Carvina Capital, notes, reflects “a market that prices strategic optionality as well as cash flow, which is why investors now weigh software portability, ecosystem depth and policy continuity alongside headline performance metrics.”
On the supply, software and tooling fronts, strategic constraints remain material. High-bandwidth memory supply concentrates with three global producers, which tightens availability through the current fiscal year and into 2026. Chinese buyers secure notable volumes earlier in the year, but inventories appear finite by year-end 2025 on Carvina Capital’s analysis. Domestic alternatives are under development, with 2026 output guidance indicating a limited initial run that could equip several hundred thousand accelerator packages. On the software side, CUDA retains a wide developer base, and Chinese frameworks continue to progress from a less mature starting point in the present cycle. Lithography and manufacturing tools in legacy nodes show advances, although domestic market share in older i-line equipment remains low in the current year.
At the policy level across both jurisdictions, a geopolitical overlay complicates corporate planning. Export regimes in the United States constrain sales of advanced parts to China during the period, and regulatory scrutiny in China raises questions about supply undertakings associated with earlier acquisitions. Rare earths policy features as negotiating leverage, with China’s processing share near 90% over the preceding twelve months, reinforcing the importance of material security to end-to-end compute capacity.
For allocators considering portfolio construction, the practical effect is a bifurcated path. Training workloads that demand the highest bandwidth and most advanced packaging remain concentrated in the United States-led stack, whereas Chinese platforms broaden access for inference and for model classes that tolerate longer training cycles in the current period. The outcome, Jacobs argues, is that “effective portfolio construction calls for a two-track view of digital infrastructure, balancing secure access and a supportive developer base with the usual focus on cost and results.”
Taking a multi-year horizon into view, forward-looking timelines come into sharper relief. Expert consensus tracked by Carvina Capital suggests a five-to-ten-year horizon before Chinese platforms consistently match top-tier United States performance in complex training tasks. Measured against that interval, the near-term picture points to continued domestic substitution, selective performance parity in defined workloads and persistent bottlenecks in memory and tools. “Institutional investors who update their playbooks for a two-system world, set tolerances for regulatory swings and require evidence of software resilience across stacks will be better placed to navigate the next four quarters,” Jacobs observes, “because returns now depend on understanding how policy, physics and capital intensity interact, not on a single benchmark score.”
About Carvina
Carvina Capital Pte. Ltd. (UEN: 201220825D) is a Singapore-based investment firm established in 2012. The company focuses on research-led, long-only public equity strategies for institutional and professional investors, and it is evaluating offerings that could be made available to retail clients. Its disciplined risk framework and evidence-based research process are designed to compound capital through full market cycles. Further information is available at carvina.com.
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