China pressures domestic companies to use national AI chips instead of Nvidia

US Response to Export Controls on China

Bloomberg reported on the 28th that the Chinese government is pressuring domestic companies to purchase Chinese-made AI chips instead of products from Nvidia, the leading American artificial intelligence (AI) chip company.

According to anonymous sources cited by the news agency, Chinese regulatory authorities including the Ministry of Industry and Information Technology have issued a "window guideline" to domestic companies advising restraint in purchasing Nvidia's H20 graphics processing units (GPUs) used for AI model development and operation. Although the window guideline has no legal binding force, it is an unofficial recommendation indicating the government's direction. The guideline also includes instructions to increase reliance on domestic AI chip manufacturers Huawei and Cambricon.

The Chinese government's move is also known to aim at reducing the burden on domestic AI startups and avoiding escalating tensions with the United States. China is reportedly seeking to expand this guideline through regional trade organizations.

The news agency analyzed that China issued this guideline as a measure to develop its semiconductor industry and prepare for U.S. regulations. Earlier, in May, Chinese regulatory authorities had presented guidelines to major automobile manufacturers to increase the usage ratio of domestic semiconductors to 25% by next year.

Nvidia and related Chinese departments did not respond to requests for comments on this report, the news agency said.

It is reported that major Chinese IT companies ByteDance and Tencent had already stockpiled a significant amount of Nvidia chips before the implementation of U.S. export controls. Some companies are purchasing domestic Huawei chips in accordance with Chinese authorities' guidelines while also rushing to secure Nvidia chips, anticipating the possibility of additional regulations.