Beijing orders state-funded data centers to use domestic AI chips

Beijing has issued guidance in recent weeks requiring new data centre projects that receive any state funding to use only domestically produced artificial intelligence chips, officials and industry sources said, a move that compels projects less than 30 percent complete to remove or cancel planned purchases of foreign processors and could affect major suppliers including Nvidia, AMD and Intel.

The guidance, according to people familiar with the matter, directs regulators to bar imported AI accelerators from state-backed facilities that are in the early stages of construction, while projects at a more advanced stage will be assessed on a case-by-case basis. The measures are reported to cover current shipments and widely circulated higher-end processors, including models that are restricted by export controls but have entered China through unofficial channels. At least one privately funded project that had planned to deploy foreign chips has been suspended after receiving state support, the sources said.

Chinese provinces are also reported to be offering incentives to accelerate the switch to local silicon. Local governments in regions that host large data centre clusters are said...