China profits from US AI boom despite Washington’s tech curbs, research says

China is gaining from America’s trillion-dollar artificial intelligence spending spree despite Washington’s efforts to curb Chinese technology ties, as the US data centre boom ripples through Asian technology supply chains, according to research by Oxford Economics.

Roughly US$2 trillion worth of data-centre projects are planned or under way in the US, according to a report by the consultancy, with as much as three-quarters of the cost tied to equipment such as semiconductors and servers.

That spending was translating into a sharp rise in US imports of electronic goods, much of it sourced from Asia as well as Mexico, the report said.

The most visible winners were Taiwan and South Korea, which export advanced chips, including memory chips, that are crucial for AI applications, the consultancy’s analysts said. But China had also emerged as an unlikely beneficiary of the US data centre construction boom, they added.

While direct exports from China to the US had waned amid tariff wars and geopolitical tensions between the world’s two largest economies, China’s exports to other Asian economies had increased, the report said. This showed that the country remained “enmeshed in Asian supply chains” and was probably still benefiting from US AI capital expenditures, albeit indirectly.

With Taiwan Semiconductor Manufacturing Corporation, or TSMC, being the primary producer of US chip giant Nvidia’s advanced semiconductors, Taiwan was playing a central role in the global semiconductor market, Oxford Economics said. But other Asian markets also contributed, highlighting strong supply chain links within Asia’s tech sectors, it added.