KATHMANDU: Nepal is advancing on a five-year roadmap to strengthen its artificial intelligence (AI) and semiconductor readiness as the global tech landscape undergoes a seismic shift driven by China’s challenge to decades of U.S. dominance in high-end chips and AI systems.

China’s push has gained momentum following a series of breakthroughs by domestic firms.

In 2024, startup DeepSeek surprised the industry by launching an AI model rivaling OpenAI’s ChatGPT, boasting lower training costs and reduced dependence on advanced chips, briefly affecting Nvidia’s market value.

This year, Huawei and Alibaba announced plans to compete directly with Nvidia, unveiling powerful new processors and long-term strategies to curb reliance on U.S. components.

Nvidia chief Jensen Huang has since warned that China is now “nanoseconds behind” the United States in chip innovation.

The urgency for nations to develop AI capabilities is underscored by recent moves by global tech giants. U.S.-based Nvidia announced on September 22, 2025, a $100 billion investment in OpenAI, the creator of ChatGPT, to supply high-performance chips and build next-generation AI infrastructure.

AMD also signed a multi-year agreement with OpenAI on October 6, 2025, to supply AI chips, highlighting fierce competition in the global AI chip market.

These developments, alongside China’s push with firms like DeepSeek-R1, illustrate the scale of technological innovation and infrastructure required, context that informs Nepal’s strategic focus on data centers, fiber networks, domestic server assembly, and AI platforms.

Global venture funding trends, with billions directed to AI startups, further emphasize the expanding opportunities in which Nepal seeks to participate.

However, China still depends on U.S. firms for the most advanced chips used in complex AI systems, as export restrictions continue to limit Beijing’s access to Nvidia’s top-tier products.

Despite these constraints, domestic chipmakers such as Cambricon and MetaX have secured major contracts, and experts estimate China could achieve full technological independence within five years.

Against this shifting global backdrop, the Government of Nepal officially approved the National AI Policy in August 2025, marking a milestone in the country’s digital transformation journey.

The policy provides a comprehensive framework for ethical, transparent, and inclusive AI development, emphasizing six key pillars: AI governance, human capital development, research and innovation, economic and social integration, public-private partnerships, and protection of citizen rights.

The policy mandates the creation of a National AI Center and AI Excellence Centers in universities to promote research, training, and innovation.

The National AI Center, officially mandated as Nepal’s central hub for Artificial Intelligence policy implementation and national coordination, is currently undergoing the critical phase of institutional establishment following the approval of the National AI Policy, 2025.

It also stresses the integration of AI in sectors such as healthcare, agriculture, education, and public administration, ensuring AI adoption drives national development while safeguarding citizens’ rights, privacy, and data security.

Officials said the forthcoming roadmap will operationalize the policy through 2030. Plans include AI pilot projects in healthcare, agriculture, and governance; expansion of data centers and fiber networks; and incentives for local server assembly and chip packaging.

The strategy envisions data governance laws, startup support, and domestic AI platforms certified for export, aligned with the policy’s focus on robust infrastructure and ethical adoption.

By 2028, Nepal aims to position private companies in the regional AI service market, with projected annual export growth of at least 30 percent by 2030.

Tech experts say the plan could help Nepal diversify technology partnerships, reduce dependency on imported systems, and benefit from emerging Chinese hardware ecosystems while maintaining balance with Western innovation networks.

Officials confirmed that an interagency AI council will coordinate implementation and ensure Nepal’s digital transition remains transparent, ethical, and aligned with national interests.

Emerging AI fields such as natural language processing, speech recognition, predictive AI, and generative AI are expected to play a central role in the domestic ecosystem, supported by academic institutions, research labs, and private organizations.

The policy and roadmap collectively position Nepal to embrace AI innovation responsibly, foster human capital, accelerate economic progress, support sustainable development goals, and strengthen its digital economy, ensuring that the country can capitalize on global technological shifts while remaining aligned with national priorities.