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OpenAI unveiled its first custom-built inference chip on June 24, developed with Broadcom and known internally as "Jalapeño," marking a shift in the United States-China technology contest away from software development and toward control of the underlying computing stack.
The announcement came as Chinese computing firm DeepSeek sought roughly $7 billion in new investment, a move analysts and national security observers say reflects Beijing's determination to build frontier AI capabilities independent of American technology.
Infrastructure Becomes the Contested Terrain The two developments, taken together, signal what national security analysts describe as a second phase in the AI competition — one defined not by which country writes better models but by who controls the full chain of chips, energy, data centers, and cloud systems that power advanced AI.
Huawei has continued expanding its domestic semiconductor ecosystem targeting AI applications, while Xi Jinping has directed the People's Liberation Army to develop what he calls "new quality combat capabilities," a phrase Chinese military doctrine explicitly ties to machine-intelligence-enabled warfare.
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