The Chinese government has issued new guidance mandating that all state-funded data centre projects use only domestically produced artificial intelligence (AI) chips, two sources familiar with the directive told Reuters.
According to the sources, regulators have instructed projects that are less than 30 per cent complete to remove any foreign chips already installed or cancel plans to purchase them. More advanced projects will be reviewed on a case-by-case basis.
The move marks one of Beijing’s strongest efforts yet to eliminate foreign technology from critical infrastructure and advance its goal of AI chip self-sufficiency amid ongoing trade tensions with Washington.
China’s access to advanced AI chips, particularly those made by U.S. company Nvidia, has long been a flashpoint in U.S.–China relations. U.S. President Donald Trump recently said Washington would allow China limited access to Nvidia products, excluding the most advanced models.
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The new policy, however, could severely impact Nvidia and other foreign chipmakers such as AMD and Intel, while benefiting Chinese firms including Huawei and Cambricon. Some state-funded projects have already been suspended following the directive, Reuters reported.
China has invested more than $100 billion in AI data centres since 2021, most of which have received government support. Analysts say the move could accelerate the growth of domestic semiconductor companies, but also widen the technological gap between China and the United States in high-end AI computing.
The Cyberspace Administration of China and the National Development and Reform Commission have yet to comment on the reported directive.
