by HAOYU ZHANG
BEIJING – CHINA has instructed major domestic technology companies, including ByteDance, Alibaba, and Tencent, to suspend purchases of advanced Nvidia AI chips, citing national security risks and a drive toward semiconductor self-sufficiency.
The directive, issued in late July, covers Nvidia’s high-end H20, L20, and L2 models. Regulators urged companies to adopt homegrown alternatives as Beijing seeks to reduce dependence on U.S.-made chips amid intensifying tech tensions with Washington.
Analysts say the move could significantly boost demand for locally produced semiconductors, particularly from Chinese chipmakers such as Semiconductor Manufacturing International Corp (SMIC), whose shares rose 5% on Tuesday following the news.
Industry watchers also expect Huawei to play a larger role in supplying domestically developed AI chipsets.
Tech experts view the decision as both a strategic and geopolitical maneuver. “Chips are no longer just the raw material of the tech world, but the key to global power dynamics,” said one analyst, noting that the suspension signals a new front in the U.S.–China technology rivalry.
Some believe the shift could accelerate the emergence of two competing global AI infrastructures — one dominated by U.S. firms like Nvidia, AMD, and Intel, and another centered on Chinese-developed technologies.
The ban adds another layer to ongoing trade and technology disputes between the world’s two largest economies. With AI and semiconductor capabilities increasingly linked to national security, the decision is expected to reshape global supply chains and intensify the race for leadership in advanced computing.
– CAJ News
