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China has put domestic artificial intelligence chips on the official procurement list for the first time, giving a boost to the country’s tech sector ahead of US President Donald Trump’s move to allow Nvidia exports to the country.
The Ministry of Industry and Information Technology recently added AI processors from Chinese groups including Huawei and Cambricon to the list of government-approved suppliers, according to two people familiar with the matter.
The move was designed to increase the use of domestic semiconductors in China’s public sector and could contribute billions of dollars in new sales to local chip makers.
The move came before Trump announced on Monday that he was lifting US export controls and allowing Nvidia to ship its advanced H200 chips to “approved customers in China.” However, these sales may still be hampered by opposition from some Washington lawmakers and Chinese officials.
People familiar with the matter said China’s new procurement list has not yet been made public, but many government agencies and state-owned companies have already received the guidance document. While they have been urged to support local chip makers before, this is the first time that public sector groups have received written instructions.
The move signals Beijing’s determination to free the country from dependence on US technology and strengthen its domestic semiconductor industry in the AI race against the US.
The Information Technology Innovation List – known as Xinchhuang in Chinese – serves as a guideline for government agencies, public institutions and state-owned companies that spend billions each year purchasing IT products.
The list is part of Beijing’s strategy to reduce China’s dependence on foreign products following Washington’s export controls.
Domestic microprocessors made by AMD and Intel, as well as operating systems that replaced Microsoft’s Windows, have been added to the list over the years.
This has led to the gradual phasing out of foreign technology products in China’s public institutions such as government offices, schools and hospitals, as well as state-owned companies.
The move also reflects confidence that domestic AI chips have reached the performance level to replace their US counterparts, following a concerted effort by Beijing to focus resources on the area over the past few years.
China recently increased subsidies to tech giants like Alibaba and Tencent to help them cope with the high electricity costs of using less efficient domestic semiconductors, cutting energy bills for some of the country’s largest data centers by up to half.
Efforts to replace Nvidia’s technology with domestic counterparts have met some resistance from companies.
An executive at a state-owned financial institution said that although they have allocated Rmb100mn ($14mn) to buy domestic AI chips from inventory this year, most of these Chinese processors purchased by the group are now sitting idle.
His firm’s quantitative trading models were built based on Nvidia’s hardware, and switching to Huawei’s processors would entail a significant amount of optimization work, including rewriting the code in a language they are not familiar with.
Such reluctance to change to a new architecture is common in a transition phase, according to one Chinese policymaker, who said the country needs to gain greater technological independence. “Growing pains are inevitable,” he said. “But we have to get there.”
MIIT did not respond to requests for comment.
Additional reporting from Cheng Leng and Ryan McMorrow in Beijing
