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US Shouldn’t Underestimate China: Substrate’s Proud

The US needs to have a “leap-ahead” strategy to take on China in the AI race, says James Proud, founder and CEO of chip-foundry startup Substrate. He discusses growing AI competition between China and the West with Caroline Hyde on “Bloomberg Tech.” ——– Like this video? Subscribe to Bloomberg Technology on YouTube:   Watch the…

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The US needs to have a “leap-ahead” strategy to take on China in the AI race, says James Proud, founder and CEO of chip-foundry startup Substrate. He discusses growing AI competition between China and the West with Caroline Hyde on “Bloomberg Tech.”
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6 Comments

6 Comments

  1. @daShadoSage

    December 18, 2025 at 4:36 pm

    Will believe him about his product and him about China well I see it

    I’ve heard for years how close China has been. Never trust a person who has a financial interest. He’s trying to get more funding for higher valuation with the same old “We have to beat China! They’re so close!” Good for him though. If it helps innovate. But we’ll see

    • @howardlee357

      December 18, 2025 at 5:51 pm

      Well, you have to keep in mind that China is competing not just against the United States but instead the entire developed world. There is no ASML in the United States and there is no TSMC in the United States either.

      So when they talk about denying China access to American chips like Nvidia, those chips are really an international collaboration. Both ASML and TSMC have thousands of suppliers each that are strewn across Europe, East Asia and North America. And those Nvidia chips, they may be designed in the US, but they are produced in Taiwan by machines made in the Netherlands.

      China is trying to do all three, design the chips, create the fab facilities, and the lithography machines. As well as nurture the thousands of suppliers.

      Sure, there will always be those who will relegate China to a bunch of copycats and just making cheap products. But that isn’t reality. But I suppose there’s a reason why Fox News exist, because often in times that’s what some people want to hear.

    • @daShadoSage

      December 18, 2025 at 6:48 pm

      ​​​​​​​​​@howardlee357Yes. All mostly true. But China is trying to reproduce even more than that. They’re trying to recerate an entire deep vertical and horizontal cross-border ecosystem, supply chain, operations, and infrastructure in one country.

      Nvidia alone is not just chips design, they themselves are an entire gigantic (world’s most valuable company) vertical and horizontal ecosystem with deep software & developer paltform layer (CUDA and applications), networking, and operations with decades of experience that has the founder still at the helm. They have been investing in and acquiring companies in networking, chip design, LLMs, nuclear energy, space data centers, phototronic chips, robotics, data centers, DRAM, EDA (also a US dominated tech that is nearly as difficult to reproduce as EUV), etc. etc. They even just launched their own open source open weight LLM model to directly compete with Deepseek and others.

      Additionally, the US is, in fact, working on bringing more of the value chain onshore. TSMC has one fab in Arizona already producing 4 and 5 NM advance chips. A second fab for 3 NMs is completed and will start volume production in 2028, while a third for 2 NM/A16 chips is already under construction. More fabs are being commissioned and breaking ground, including from Intel, who has already started high level production in their first plant this year with 2 more fabs over the next 7 years, after a boost in government and private investment.

      China hasn’t even been able to compete on prior generation chip fabrication yield yet. Their yeilds are at 20-30% while TSMC Taiwan is at 80%+. TSMC Arizona hasn’t even reached the yield of Taiwan yet and they’re the same company that knows it the best!

      Repliacting ASML will be difficult, and there are a number of startups working on it. But unlike China, ASML is a close and valued partner, so there’s very little worry there. To me, the only last three pieces (of over a dozen pieces that US and its allies already lead in) in order of importance are, rare earth minerals supply, fast buildout of energy availability and future energy tech (SMRs, thorium, geothermal, battery, etc.), and very low cost prior generation chip fabrication that would have to be located in ASEAN + India that can directly compete with China on cost but perhaps not directly volume.

      Edit: I’ll add a fourth key need. Education + training of available workers.

  2. @kamenidriss

    December 18, 2025 at 4:59 pm

    the US should be running as fast as they can, like yesterday. ASSUME china is ahead

  3. @aburaselshontu

    December 18, 2025 at 7:45 pm

    America has f**ked up. What America can do, is to harass small and poor countries. America is a pirate, evil, terrorist country.

  4. @matt.stevick

    December 18, 2025 at 8:26 pm

    have not seen a chyna tech company in the top ranking value cap. list be like:
    🇺🇸
    🇺🇸
    🇺🇸
    🇺🇸
    🇺🇸
    🇺🇸
    etc

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Bloomberg’s Ed Ludlow breaks down Tim Cook’s final Apple earnings call as CEO – a story of supply crunches, demand misreads and a tough outlook. Plus, Amazon’s shares roar on AI progress, big spending and accelerating cloud growth. And, after OpenAI’s breaches, Anthropic is now saying its own AI models breached three organizations during cybersecurity tests.

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Chinese AI startup Moonshot’s Kimi models are powered in part by around 20,000 Nvidia Hopper chips supplied through a computing agreement with Alibaba, according to sources. Bloomberg’s Peter Elstrom explains what the arrangement reveals about China’s AI infrastructure and the role of US technology in training frontier models. He joins Ed Ludlow on “Bloomberg Tech.”
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Recent disclosures from Anthropic and OpenAI have shifted the AI conversation from model capabilities to real-world deployment and security. Lux Capital Partner Deena Shakir says the next wave of AI innovation will be built on trust, partnerships and vertical applications like health care and robotics, not just more powerful foundation models. She joins Ed Ludlow on “Bloomberg Tech.”
——–
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