”The more scale you have,” AMD CEO Lisa Su says, “the more you can do for your customers.” For investors, the picture is more complicated.

(Bloomberg Opinion) — Beijing’s goal of building a self-reliant technology industry has been elevated to become a strategic pillar, part of the latest five-year plan setting out top national priorities. This means that China is redoubling efforts to wean itself off foreign companies, with the result likely to be a cohort of domestic giants and a slow freeze-out of overseas competitors.Just as the U.S. government starts looking to rein in, or even break up, big technology companies in the belief they have too much power, China is going in the opposite direction. We should expect to see more money, more policy favoritism, and more attention from party cadres aimed at ensuring the establishment of big successful chip and software firms.The Fifth Plenum of the Chinese Communist Party’s 19th Central Committee wrapped up Thursday by tasking the nation to, among other things, develop self-reliance and build its technological power.The result will be a more insular approach to industry and trade as Beijing strengthens a robust domestic market for those up-and-coming heroes to ply their wares.Foreign companies — notably in semiconductors, software or materials — that still believe China is a viable long-term business are kidding themselves. Only those supplying crucial products and services not available locally will have any shot at sustained market access, and even then only until a domestic alternative comes along. Intel Corp., Nvidia Corp. and Microsoft Corp. should take note. Apple Inc. and Alphabet Inc. ought to be wary. Meanwhile, suppliers of the equipment, chemicals and software used to design and build chips should enjoy eating at the trough now, because the good times won’t last, if Beijing can help it.The likes of ASML Holding NV, Tokyo Electron Ltd., and Synopsys Inc. might see some growth years as Chinese companies lean on them to supply the core ingredients of a semiconductor industry, if the U.S. administration doesn’t get in their way to further stymie China’s advancement. But they’d be foolish to not understand that local rivals, backed by Beijing, are doing everything possible to replicate their products. Over the past decade, the government has done a lot to improve intellectual property enforcement and secure economic rights over technological innovation. Nonetheless, it would be a brave Chinese prosecutor or judge who sides with a big Western company over a local upstart in any case of alleged IP theft. I believe we’ve yet to see the next era of national champions emerge. Alibaba Group Holding Ltd. and Tencent Holdings Ltd. have been the backbone of China’s internet development. Beijing would want to see their equivalents in semiconductors come forth. Huawei Technologies Co. fits the role, a fact that Washington recognizes by attempting to impede the Shenzhen company’s chip division HiSilicon. Semiconductor Manufacturing International Corp. will also play a part, but after two decades it has still failed to match rivals like Taiwan Semiconductor Manufacturing Co. or United Microelectronics Corp. Then there’s a collection of state-backed chipmakers such as those in the orbit of the esteemed Tsinghua University.Yet the Alibaba of chips may not yet be born.It could be bubbling away in a small Shenzhen office, helmed by former HiSilicon execs determined not to give up their semiconductor dreams despite Washington’s pressure. Or the topic of Zoom calls among locked-down postgrads finishing up their American degrees and planning to return home. Or in the bank balance of a Taiwanese engineer, enticed by the promise of vast riches, after a decade of toiling away at TSMC.Whoever the next big Chinese tech giant is, you can be sure that Beijing has the money and determination to make sure it succeeds. At all costs. This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Tim Culpan is a Bloomberg Opinion columnist covering technology. He previously covered technology for Bloomberg News.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

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While Intel stumbled, other major chip developers and manufacturers have been generally upbeat amid strong end-market demand. And M&A; activity is on the upswing again.

Intel Corporation (NASDAQ: INTC) announced Thursday a deal to bolster its expertise in artificial intelligence, an up-and-coming technology.What Happened: Intel said it will acquire SigOpt, a San Francisco-based startup that provides a leading platform for the optimization of artificial intelligence software models at scale.The chip giant said it plans to use SigOpt’s software technologies across its AI hardware products to help accelerate, amplify and scale its AI software solution offerings to developers.Intel said it expects the deal to close in the fourth quarter. Transaction terms of the deal weren’t disclosed.”SigOpt’s software technologies combined with Intel hardware provide competitive advantages and differentiated value for data scientists and developers, and they complement Intel’s existing AI software portfolio,” Intel said in the release.Related Link: Understanding Intel’s Unusual Options ActivityWhy It’s Important: Intel has been panned of late for having ceded technological leadership in chip designing. Its focus on emerging technologies will likely help redeem some of its lost pride.SigOpt has among its customers base Fortune 500 companies across industries, as well as leading research institutions, universities and consortiums.Intel expects the AI silicon market to be greater than $25 billion by 2024.At last check, Intel shares were edging down 0.38% to $44.08.SigOpt CEO and co-founder Scott Clark (left) and CTO and co-founder Patrick Hayes will join the Machine Learning Performance team at Intel. (Credit: SigOpt)See more from Benzinga * Click here for options trades from Benzinga * AMD Analysts See Momentum Ahead, With Xilinx Deal Expanding Market Opportunity * AMD Expected To Draw Strength From Intel’s Weaknesses, Gaming Console Chips(C) 2020 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.