Technology

Huawei Technologies’ claim of a new route to more advanced chipmaking sent semiconductor shares higher globally, adding momentum to a technology market already being reshaped by heavy artificial intelligence spending, falling model prices and rising security concerns.

The company said its new “Tau Scaling Law” could allow it to develop more advanced chips without relying on specialized U.S. equipment that has been subject to blockades. Rather than focusing only on shrinking transistor size, the approach emphasizes reducing the time required to move data within chips. Huawei said it expects the method to support designs for high-end chips comparable to those manufactured with a 1.4-nanometer process by 2031.

The announcement underscored the central pressure point in global technology: demand for AI computing is rising quickly, while the hardware supply chain remains constrained by manufacturing complexity and geopolitical limits on access to advanced equipment. It also highlighted why investors remain highly responsive to any sign that chipmakers or major technology companies may find new ways to improve performance outside the conventional path of process-node scaling.

That optimism is being tempered by financial-stability concerns. The European Central Bank warned that the rapidly expanding AI investment boom, increasingly funded by private credit, has become a new risk for the euro area’s financial system. The ECB said insurers, pension funds and other investors could face significant losses if AI technology does not live up to its high expectations.

Competitive pressure is also intensifying in the AI software market. DeepSeek made a 75% price cut on its V4-Pro generative AI model permanent, sharply lowering inference costs and escalating price competition among frontier-class models. The move is expected to put pressure on rivals including Anthropic and OpenAI to revisit their own pricing strategies.