Intel's race for second and India's deep tech funding crunch - Nikkei Asia

Published 7 hours ago• 7 minute read

Hello from California, this is Yifan, your #techAsia host this week.

It has been a great week for American semiconductors, with President Donald Trump putting an end to the Biden-era AI chip export control rule that classified countries into three tiers and imposed limitations on how many and what kind of chips those in tiers 2 and 3 can buy from the U.S.

The rescinding of the rule was announced as Trump touched down in Saudi Arabia with a group of the most prominent U.S. tech CEOs, including Jensen Huang, Elon Musk and Sam Altman.

Nvidia chief Huang has been lobbying for more relaxed chip export control rules, arguing that the U.S. is missing out on opportunities as Washington and Beijing race to dominate the AI era.

His efforts paid off. On the same day the rule change was announced, Nvidia unveiled partnerships with Riyadh that include selling 18,000 of its latest Blackwell chips to Saudi AI company Humain. Similarly, AMD announced an AI infrastructure partnership with Humain that will entail up to $10 billion in investment.

It seems like a win-win deal for both the U.S., which needs to sell chips, and the Middle East, which needs the chips to develop AI. But an investor at a Dubai family office warned that those hotly sought-after Nvidia chips might come with some strings attached.

"The kingdom has big ambitions for AI and does not want to pick sides if they don't have to, as there are huge opportunities in both the U.S. and China," the investor said.

But Washington might force countries like Saudi Arabia to choose by both sweetening the deal and firing some warning shots.

In replacing the Biden-era rule, the U.S. Department of Commerce issued three new guidelines on chips for artificial intelligence applications. Among these was an "alert" to the tech industry that using advanced chips from China -- namely Huawei's Ascend chips -- without a license is a violation of U.S. export control rules.

Is this an overreaction from Washington? After all, the Ascend is still in extremely short supply, even in China. Or is it more a sign of what is to come, and that the day when countries and companies have to choose to build their AI future on Huawei or Nvidia chips is actually not so far away?

Looking ahead, don't miss Nikkei Asia's webinar on "Tech Asia Live: What the trade war means for Asia's supply chains" on May 23.

Our tech reporters will discuss how companies are responding to the tariff war, as well as the impact of Trump's policies on China's drive to bolster its tech manufacturing prowess. Register for free here.

Intel has a new CEO and an old dream: It wants to become the world's No. 2 contract chipmaker by 2030. That would mean beating out Samsung, currently the second-largest maker of chips for others, and carving out a market for itself even as TSMC tightens its grip on the leading position amid rising AI chip demand.

The U.S. chip giant's turnaround plan for its foundry business hinges on its execution of 1.8-nanometer technology, leveraging advanced packaging capacity, and being able to "pick up what TSMC doesn't want," Nikkei Asia's reports.

While the gap between Intel and the "big two" looks formidable, the U.S. company could catch up with Samsung if it can establish itself as a "second source" for advanced chip manufacturing.

As AI and geopolitical uncertainties drive customers like Nvidia's to find a reliable TSMC alternative, it might be now or never for Intel's foundry ambitions.

Growing domestic internet consumption, increasing adoption of artificial intelligence by companies and a government push for domestic data to be stored locally is driving an unprecedented growth in India's data center industry, write the Financial Times' and .

Telecom giant Airtel is planning to double the capacity of its data center business in less than three years, while top conglomerates including Asia's richest man Mukesh Ambani's Reliance and Gautam Adani's Adani Group have announced plans to build data centers with total capacities reaching a gigawatt.

Ashish Arora, chief executive of Airtel subsidiary Nxtra, the domestic leader in data centers, told the Financial Times it would invest about $600 million in its latest round of expansion to achieve nearly 400 megawatts in capacity by the end of 2027. It was also gearing up for further growth over the next five to seven years, he said, aiming to be the number one or two player.

As this competition brings down data processing rates, and with the availability of a vast talent pool, India could become a regional hub for global cloud service providers like Amazon, Google and Microsoft, say analysts.

But the power-hungry industry, expected to grow from 1.4GW last year to 9GW by 2030, is likely to add further strain on the struggling state-owned grids.

China bought a record amount of foreign chipmaking equipment in 2024 as part of efforts to massively expand domestic chip production as well as build up stockpiles of key tools amid rising tensions with the U.S.

Of the $30.9 billion imported from major sources, nearly $20 billion came from Japan and the Netherlands, Nikkei Asia's and Lauly Li report, with smaller sources like Malaysia and Singapore also rising sharply.

Japan remained China's top source of semiconductor manufacturing equipment last year, closely followed by the Netherlands, while Singapore and the U.S. came in third and fourth by origin, according to Nikkei Asia's analysis of Chinese customs data.

While Silicon Valley might have become obsessed with startups dealing in robotics, rockets, chips and other complex technologies, such deep tech companies are having a much harder time fundraising in India, Nikkei Asia's Sayan Chakraborty writes.

In early April, India's commerce minister Piyush Goyal told a startup conference that Indian companies should take a cue from their Chinese counterparts and get cracking on complex technologies. There was too much focus on quick deliveries and "fancy ice creams and cookies" at the moment, he said.

Unlike e-commerce, ride-hailing or financial services, where revenues kick in from the beginning, startups focusing on deep tech take years to develop and commercialize their products. Venture capitalists, however, often want to see revenues -- or at least a clear path to revenues -- before they invest.

As a result, Indian deep tech startups raised $4.7 billion from 2014 through April 28, only about 3.2% of the total funds funneled into Indian startups during that time, according to data company Venture Intelligence.

Welcome to the Tech Latest podcast. Every Tuesday, our tech experts Katey Creel and Akito Tanaka deliver the hottest trends and news from the sector.

In this episode, Akito speaks with Taipei tech correspondent Lauly Li about the Chinese tech industry's efforts to counter U.S. tariffs.

1. US issues worldwide restriction on using Huawei AI chips (Nikkei Asia)

2. SoftBank reports surprise $3.5bn profit as telecom valuations improve (FT)

3. Chinese companies purge supply chain of foreign parts amid US trade war (FT)

4. Sony sees momentum in games and film despite Trump tariffs (Nikkei Asia)

5. SoftBank, Sumitomo Mitsui to forge digital banking partnership (Nikkei Asia)

6. Is Japanese anime the next global IP gold mine? (FT)

7. China's robot makers aim to automate Japan's industrial heartland (Nikkei Asia)

8. Asia's tariff-hit chip investments to recover by September: Towa (Nikkei Asia)

9. Hong Kong crypto investor Animoca plans US listing as Trump lures more groups (FT)

10. Nintendo predicts 15mn Switch 2 sales in tariff-hit first year (FT)

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