The Chinese chip market is exactly like any other market in any other country, except it's run by the largest and arguably most successful autocratic organization in the world, one which views reducing reliance on external suppliers who can turn the taps on and off at will/whim, to be of existential importance. I mean, aside from them being autocratic despots and control freaks, I can't even blame them. Your main adversary's president (and we all know how high-quality they always are) can wake up any day and decide you don't get to buy a critical part of the AI tech stack, good luck with all your future endeavours!

Yeah, no. No one in Beijing will let Nvidia or the White House have that kind of power in the long run because the free market knows best and golly gee where will we get the money and whatnot. They will buy whatever they can to bridge the gap to a time when they own their own tap.