Catenaa, Monday, November 10, 2025- China has ordered state-funded data centre projects to use only domestically produced AI chips, marking a major step to reduce reliance on foreign technology, sources told Reuters.
Projects less than 30% complete must remove installed foreign chips or halt planned purchases, while advanced projects will be reviewed individually.
The move affects AI chips from Nvidia, AMD, and Intel, as China pushes for self-sufficiency in high-end computing amid ongoing US-China tensions.
Nvidia, once holding 95% of China’s AI chip market in 2022, now reports zero share, as state directives and previous US export restrictions have blocked its advanced products.
Analysts said the guidance could halt projects receiving billions in state funding and redirect sales to domestic manufacturers such as Huawei, Cambricon, MetaX, Moore Threads, and Enflame.
Some projects have already been paused, including a facility in northwestern China that planned to deploy Nvidia chips.
The directive also impacts Nvidia’s H20 chips, while more advanced B200 and H200 processors remain unavailable due to US export controls, though gray-market channels continue.
While the policy strengthens local chipmakers, it also presents challenges. Many developers are accustomed to Nvidia’s software ecosystem, and domestic production faces limits due to sanctions on semiconductor equipment.
Observers warn that the push for AI independence may widen the gap in high-performance computing between China and the US, which continues investing heavily in advanced AI data centres.
