Maybe this is what you meant by "Chinese arms race" but there is, though not quickly, a massive wave of increased hardware supply incoming. Again, let me mention this isn't coming soon in terms of the AI bubble conversation. But China is pushing for a home grown EUV and fabs that should start coming online and having an impact in 2030.

The reason that is important is it will fuel the competitiveness of on premises and local open weight models.

Though maybe it's less useful in the "bubble" conversation since over four more years you could fit in various booms and busts before the supply side significantly starts changing.