China has officially added domestic AI chips to its procurement list. This is a significant step for its tech sector, especially as the U.S. relaxes export controls for Nvidia.
The Ministry of Industry and Information Technology has included AI processors from local companies like Huawei and Cambricon. This is aimed at boosting the use of homegrown semiconductors across China’s public sector, potentially worth billions for domestic chipmakers.
This move coincides with U.S. President Donald Trump’s decision to allow Nvidia to export its advanced H200 chips to approved buyers in China. However, political pushback could still complicate these sales.
Although the new procurement list hasn’t been made public, some government agencies have already received it. Previous guidance encouraged support for local chipmakers, but this marks the first official directives for public-sector organizations.
Beijing aims to reduce dependence on foreign technology, especially amid rising tensions with the U.S. The Information Technology Innovation List—called Xinchuang—provides guidelines for government spending on IT products. This list has seen the gradual phase-out of foreign technology in Chinese institutions, including government offices and hospitals.
In the past few years, China has worked to replace products from companies like AMD, Intel, and Microsoft with its own domestic options. This reflects a national strategy to build a self-sufficient tech ecosystem.
Experts say this shift shows confidence in China’s domestic AI chips, which have improved significantly in performance. The Chinese government has even increased subsidies to alleviate energy costs for data centers, helping companies like Alibaba and Tencent adapt.
However, not everyone is enthusiastic. Some companies express hesitation to switch to new domestic processors due to compatibility issues. For example, a state-owned financial institution invested around $14 million in domestic chips this year, but many of these processors remain unused. Transitioning to newer technology often requires rewriting code, which can be daunting.
Despite the challenges, Chinese policymakers emphasize that these growing pains are necessary for technological independence. As one noted, “The growing pains are unavoidable. But we have to get there.”
To better understand this trend, consider recent data: a survey of tech companies in China revealed that 65% of them feel pressured to switch to domestically produced technology, while 40% cite performance concerns as a major obstacle.
In summary, China’s focus on boosting its semiconductor industry reflects a significant shift in its tech landscape. As the country continues to develop its capabilities, the balance between national independence and the adaptation of new technologies will be crucial. For further reading on this subject, you can check the MIT Technology Review.
