China Prohibits the Use of Foreign AI Chips in Data Centers
The Chinese government has released instructions mandating that new data centre projects, which have obtained any state funding, must exclusively utilize AI chips produced domestically, as per reports.
In the last few weeks, Chinese regulatory agencies have instructed data centres that are under 30 percent complete to eliminate all foreign chips already installed or to abandon plans to acquire them.
For projects further along, decisions will be made individually, according to reports.
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This action may signify one of China's most determined efforts to remove foreign technology from its essential infrastructure during a lull in trade tensions between Washington and Beijing, while pursuing its goal of AI chip independence.
China's ability to obtain advanced AI chips, particularly those produced by Nvidia, has been a significant source of tension with the U.S. as both compete for supremacy in high-performance computing and AI.
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US President Donald Trump stated in a Sunday interview after his discussions with Chinese President Xi Jinping the previous week that Washington will "allow them to handle Nvidia but not regarding the most advanced" chips.
Beijing's recent action, however, would crush Nvidia's aspirations of reclaiming its Chinese market presence, while offering local competitors, such as Huawei, another chance to boost their chip sales.
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Reports indicated that it is uncertain if the guidance is applicable across the entire country or just to specific provinces. The sources did not specify which Chinese regulatory agencies had given the directive. They chose not to reveal their names because of the delicate nature of the issue.