China's major tech firms, including Alibaba, Tencent, and Baidu, are beginning to switch to domestically produced chips as they face a shortage of Nvidia processors and stricter U.S. export controls. This shift aims to address the increasing demand for artificial intelligence technologies within the country.

The Dutch government has taken control of Nexperia, a Chinese-owned chipmaker, to ensure the availability of semiconductors and protect economic security in Europe. This decision, prompted by governance concerns, may escalate tensions between the EU and China amidst ongoing trade issues. Nexperia's owner, Wingtech, plans to seek legal remedies and protect its rights following the government's intervention.