TECH - China Urges Tech Giants To Shift Away From Nvidia And Other Foreign Chip Makers Boost Domestic AI Chip Purchases: Report | Benzinga
China has reportedly instructed its tech giants to reduce their reliance on foreign-made chips, particularly those from NVIDIA Corp (NASDAQ:NVDA), and increase their purchase of domestic AI chips.
What Happened: The Chinese government has advised major tech companies such as Alibaba Group Holding Ltd (NYSE:BABA), Baidu Inc (NASDAQ:BIDU), ByteDance, and Tencent Holdings Ltd (OTC:TCEHY) to decrease their spending on foreign-made-chips, including those from Nvidia, The Information reported on Monday, citing people familiar with the matter.
These companies are now expected to purchase an equal number of locally and foreign-made AI chips for their new data centers.
The directive, as per The Information, has not been strictly enforced, and it is unclear if any penalties will be imposed for non-compliant companies.
China’s new directive poses a significant challenge for Nvidia, which has been striving to provide specialized offerings for the Chinese market. The company is developing three new GPUs for China, designed to meet the restrictions under prevailing U.S. sanction rules.
China is a critical market for Nvidia, ...