On September 19, 2025, Reuters Breakingviews published an analysis titled “China's chipmakers upend Beijing's best laid plans”. The piece details how Alibaba’s T-Head and Baidu are rapidly advancing in AI chip development, challenging Huawei’s status as China’s designated chip champion.

Huawei has been aiming for 70% self-sufficiency in AI chips by 2027. However, recent developments show that other firms are no longer trailing quietly. Alibaba’s T-Head supplied about 72% of the 23,000 processors used in a China Unicom data centre that runs fully on domestic AI chips. Baidu has also secured chip orders worth over 1 billion yuan (~$140 million) from China Mobile.

The article argues that Beijing may need to rethink its policy of picking a single “champion”—letting multiple competitors thrive could be more effective in overcoming export control constraints and global competition.

Key Highlights

• Huawei’s plan for 70% domestic AI chip self-sufficiency by 2027 faces rising competition.

• Alibaba’s T-Head supplied ~72% of processors in a fully domestic-chip powered data centre built by China Unicom.

• Baidu secured large chip orders from China Mobile, showing its growing capability.

• The landscape suggests a move away from single-champion model toward more distributed competition.

Why This Matters

1. Tech Sovereignty & Strategy Shift: China’s chip strategy is evolving—rather than betting everything on one company (Huawei), it may benefit more from fostering competition among several capable firms.

2. Export Controls & Global Tensions: As U.S. and other export restrictions tighten, domestic alternatives gain importance for both security and supply continuity.

3. Innovation Incentive: When firms compete domestically, innovation in chip design and efficiency can accelerate.

4. Market & Investor Signals: These shifts affect investment flows, chip supply chains, and strategic collaboration both within China and globally.

Source
Reuters – Full Article