China has introduced a new policy requiring all state-funded data centres to use domestically produced AI chips, effectively excluding foreign suppliers such as Nvidia, Intel, and AMD from government-backed projects. The directive highlights China’s push for technological self-reliance amid growing global competition in artificial intelligence and semiconductor manufacturing.
Policy Details
The mandate applies to all government-funded and public sector data infrastructure, including AI research facilities, cloud services, and smart-city projects. Officials emphasize that the move aims to strengthen domestic semiconductor capabilities and reduce dependence on foreign technology.
According to China’s Ministry of Industry and Information Technology (MIIT), the policy seeks to:
- Promote homegrown AI chip development
- Enhance national security and technological sovereignty
- Support rapid scaling of domestic AI infrastructure
Impact on the Industry
Foreign AI chipmakers, such as Nvidia, Intel, and AMD, could see reduced access to a major government-funded market segment. Conversely, Chinese AI chip manufacturers—including Cambricon, Biren, and Hygon—are expected to benefit from increased demand, accelerating domestic AI development and production capabilities.
Analysts note that the mandate reflects a broader trend of strategic technology decoupling, as China aims to build an independent AI ecosystem capable of competing globally in next-generation computing.
Global Implications
The policy is likely to influence global supply chains, prompting foreign companies to reassess their strategies in China. Meanwhile, Chinese AI chipmakers face pressure to scale quickly and deliver competitive performance to meet ambitious government AI infrastructure goals.
Li Wei, an analyst at the China Technology Research Institute, stated, “This is a clear signal that China is prioritizing national technology security and self-reliance in AI. It will reshape both domestic and international AI hardware markets.”
The policy is expected to take effect immediately for upcoming state-funded projects, with compliance closely monitored by regulatory authorities.
