Chinese provinces offer steep power discounts to AI companies using China-made chips
Projects that are less than 30% complete are allegedly being told to abandon or remove any foreign chips already in use. For Nvidia, which once held more than 90% of China’s AI accelerator market, that effectively kills prospects for a comeback via more custom silicon. Last month, Nvidia CEO Jensen Huang said that the company’s Chinese market share has effectively plummeted to zero .
The guidance appears to target not only the H20, but also Nvidia’s higher-end H200 and B200, which are restricted under U.S. export rules but have still made their way into Chinese data centers through unofficial channels. That flow of gray-market parts may now face stricter internal scrutiny, with implications for training clusters already under construction.
Over the past two years, China has funneled more than $100 billion into AI infrastructure projects, most of them aligned with provincial or national goals for data sovereignty. That public investment is what gives Beijing’s directive real teeth. But while Chinese chipmakers have made strides, they continue to trail Nvidia and AMD in software tooling and performance density. Huawei’s Ascend line, often cited as the most mature domestic option, still lacks full parity with CUDA-based stacks.
The directive comes amid heightened U.S.-China tech tensions and a broader global reordering of AI supply chains. It remains unclear whether the new policy will eventually extend to privately funded deployments.
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Key considerations
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Reference reading
- https://www.tomshardware.com/tech-industry/semiconductors/SPONSORED_LINK_URL
- https://www.tomshardware.com/tech-industry/semiconductors/china-bans-foreign-ai-chips-from-state-funded-data-centers#main
- https://www.tomshardware.com
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