{"slug": "chinese-ai-labs-pursue-custom-chips-to-lower-costs-but-heavy-upfront-investment", "title": "Chinese AI labs pursue custom chips to lower costs but heavy upfront investment a risk", "summary": "Chinese AI labs, including DeepSeek and Zhipu AI, are developing custom chips to reduce long-term operating costs and improve hardware-software synergy, but the strategy carries significant risk due to heavy upfront investments. DeepSeek has been quietly hiring chip-design talent for a custom AI inference chip, while Zhipu AI is in early talks with domestic chip-design companies for tailored AI processors.", "body_md": "# Chinese AI labs pursue custom chips to lower costs but heavy upfront investment a risk\n\nCustom silicon allows for hardware optimisation tailored to specific architectures, such as the DeepSeek-R1 model\n\nChinese AI labs are increasingly pursuing proprietary chips, mirroring a global trend towards software-hardware integration, but industry insiders and analysts warn that the strategy carries risk due to the massive upfront investments required.\n\n“The core motivation for choosing in-house chips lies in pursuing [greater] hardware-software synergy and lowering long-term operating costs,” said Arisa Liu, chief director and research fellow at Taiwan Industry Economics Services.\n\nPaul Triolo, a partner and technology policy lead at DGA-Albright Stonebridge Group, said in his personal newsletter AIStackDecrypted that the proprietary efforts underscored how China’s leading model developers increasingly viewed silicon as a strategic extension of the model stack rather than simply another infrastructure input.\n\nDeepSeek has been quietly hiring chip-design talent without posting public job openings, according to two people familiar with the situation, who declined to be named as the matter was private.\n\nThe Hangzhou-based start-up’s plans for a customised AI inference chip began roughly a year ago and remained at an early stage, according to a Reuters report on Tuesday.\n\n[GLM-5.2 model,](https://www.scmp.com/tech/tech-trends/article/3359170/zhipu-ai-releases-harness-glm-52-model-chinese-firm-takes-aim-anthropic?module=inline&pgtype=article)was in early talks with domestic chip-design companies about tailored AI processors amid a sharp increase in its daily token usage, The Information reported on Tuesday.", "url": "https://wpnews.pro/news/chinese-ai-labs-pursue-custom-chips-to-lower-costs-but-heavy-upfront-investment", "canonical_source": "https://www.scmp.com/tech/tech-trends/article/3359963/chinese-ai-labs-pursue-custom-chips-lower-costs-heavy-upfront-investment-risk?utm_source=rss_feed", "published_at": "2026-07-09 08:00:11+00:00", "updated_at": "2026-07-09 08:22:13.105653+00:00", "lang": "en", "topics": ["artificial-intelligence", "ai-chips", "ai-startups", "ai-infrastructure"], "entities": ["DeepSeek", "Zhipu AI", "Arisa Liu", "Taiwan Industry Economics Services", "Paul Triolo", "DGA-Albright Stonebridge Group"], "alternates": {"html": "https://wpnews.pro/news/chinese-ai-labs-pursue-custom-chips-to-lower-costs-but-heavy-upfront-investment", "markdown": "https://wpnews.pro/news/chinese-ai-labs-pursue-custom-chips-to-lower-costs-but-heavy-upfront-investment.md", "text": "https://wpnews.pro/news/chinese-ai-labs-pursue-custom-chips-to-lower-costs-but-heavy-upfront-investment.txt", "jsonld": "https://wpnews.pro/news/chinese-ai-labs-pursue-custom-chips-to-lower-costs-but-heavy-upfront-investment.jsonld"}}