They benefit from a strong captive market because Chinese firms cannot use Nvidia chips and are legally barred from processing data abroad, forcing them to rely on domestic infrastructure.
https://www.bloomberg.com/news/articles/2026-06-17/microsoft...
Bytedance which runs China’s most popular Doubao AI chatbot; is spending $70B in CapEx this year, most of it outside of China (Malaysia, Thailand, Brazil, etc; and they are allowed to lease NVIDIA chips). This is roughly 50% of Microsoft CapEx.
https://www.tomshardware.com/pc-components/gpus/chinas-byted...