>- Nvidia doesn't have any magical secret sauce, and China could easily catch up

This is the simple explanation. We'll also see European companies matching them in time, probably on inference first.

This is more my thinking as well. How many big tech companies are working on their own internal TPU chip? Google's started using them in 2015. It sounds like the basic theory of getting silicon to do matrix multiplication is well established. Sure you can always be more efficient, but getting a working chip sounds very approachable. AMD hardware has been ~competitive the entire time, but they have squandered all good will with their atrocious software support.

If China sees an existential risk to getting compute capacity, I can easily see an internal decree to make something happen. Even if it requires designing the hardware + their own CUDA-like stack.