China Ditching Foreign AI Chips? Report Says New Data Centers With Government Funding Must Rely On Local Ones

• Chinese authorities have instructed data centers that are less than 30% complete to remove all foreign-made AI chips.
• The move is part of a broader effort to achieve AI chip independence amid ongoing tensions with Washington. 
• The directive poses a threat to Nvidia’s ambitions of reclaiming its Chinese market share.

China has reportedly instructed that all new data centers receiving government funding must exclusively use locally produced artificial intelligence chips. 

According to a Reuters report, individuals familiar with the directive said that projects that have already installed foreign-made chips but are less than 30% complete have been told to remove them. 

Push For Technological Self-Reliance

The move marks a significant attempt by China to reduce its reliance on foreign technology in key infrastructure sectors, part of a broader effort to achieve AI chip independence amid ongoing tensions with Washington. 

The order comes as the U.S. maintains curbs on the export of advanced semiconductors, particularly those produced by Nvidia Corp. (NVDA), to prevent their potential use in military applications. 

Nvidia’s stock inched 0.9% lower in Wednesday’s premarket. On Stocktwits, retail sentiment around the stock remained in ‘bullish’ territory amid ‘high’ message volume levels. 

Nvidia’s Blackwell AI Chip Caught In Export Ban 

On Tuesday, a Reuters report stated that the Trump administration confirmed its decision not to grant Nvidia permission to sell its latest and most advanced artificial intelligence chip, known as the Blackwell, to China. 

Last week, Nvidia CEO Jensen Huang stated that he remained optimistic about eventually selling the new Blackwell AI chips in China. The Blackwell family represents Nvidia’s most advanced line of AI chips, which far exceed the capabilities of Chinese alternatives from Huawei Technologies Co.

Currently, H20 is Nvidia’s only approved product for China. The latest directive from Beijing poses a significant blow to Nvidia’s ambitions of reclaiming its Chinese market share.

NVIDIA's stock has gained over 47% year-to-date and 42% in the last 12 months. 

Also See: Trump Renominates Jared Isaacman To Head NASA After Interim Chief Duffy’s Rift With Musk Over Moon-Landing Contracts

For updates and corrections, email newsroom[at]stocktwits[dot]com.

Share

·

Add us on