The ongoing US-China tech war is set to escalate further, with new projections indicating that China’s computing market will grow eight times faster than the US by 2029.

US President Donald Trump has already introduced trade tariffs on China, citing national security and concerns over trade deficits as justification, but China’s tech stock could be still be on the rise, a recent study suggests.

According to market insights from Stocklytics, China’s computing sector is projected to surge by 42% and reach nearly $30 billion (£24bn) by 2029, overtaking the US market’s expected $22.5bn (£18bn).

Why is China overtaking the US in computing?

The United States has been the leader in computing technology for decades, with companies like Nvidia, AMD, and Intel setting global benchmarks in AI and compute.

However, China’s strategic focus on technological independence has seen it rapidly close the gap.

By 2025, China is expected to surpass the US in computing revenue for the first time, marking the beginning of a sustained period of dominance.

“Massive government investments in technology and a massive tech-savvy consumer base gave incredible momentum to China`s computing sector. The rapid adoption of AI, 5G technologies, and cloud services has further fueled demand for advanced hardware and software, accelerating growth,” said Jastra Kranjec in a post for Stocklytics.

The revenue gap is expected to widen tenfold by 2026, with China leading by $3.2bn (£2.6bn). By the end of the decade, China’s market share in the global computing industry will climb to 25%, while the US’s share will slip from 20% to 18%.

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Google under investigation: China’s response to US tariffs

Amid this shifting technological landscape, China has launched an anti-monopoly investigation into Google directly responding to President Trump’s newly imposed US tariffs on Chinese imports.

The probe, led by China’s State Administration for Market Regulation, comes after the Trump administration announced a fresh 10% tariff on Chinese goods.

Although Google has a limited presence in China, experts suggest targeting the American tech giant is a strategic move that would leave Beijing room to escalate further if tensions rise.

The move follows a similar investigation into chipmaker Nvidia in late 2024, as China continues to resist US trade restrictions that have tightened access to high-end semiconductors.

Read more: China lauches anti-trust probe into Nvidia

A new era of AI and semiconductor competition

China’s tech resurgence is fuelled by significant investments in AI, semiconductor independence, and 5G infrastructure.

Unlike in previous decades, where Chinese firms relied on Western innovations, local companies such as Huawei, Alibaba, and Baidu are now leading in AI research, custom chip design, and cloud computing solutions.

However, US policymakers remain wary. The previous administration reinforced restrictions on China’s access to critical semiconductor technologies, banning exports of advanced AI chips and restricting sales of cutting-edge GPUs produced by Nvidia.

The measures aimed to curb China’s ability to enhance its AI capabilities, particularly in military applications.

What’s next in the US-China tech war?

With China imposing additional export controls on critical minerals like tungsten — essential for semiconductors and military equipment — the tech war will likely intensify in the coming months.

The ongoing retaliatory measures from both governments signal that a resolution is unlikely in the near future, with analysts predicting further trade barriers and policy restrictions, disruptions in semiconductor supply chains, and increased volatility in global tech markets.

While the US remains a powerhouse in AI innovation, China’s explosive growth in computing suggests a future where it could set new global standards in technology.