Reportedly, China prohibits its leading tech firms from purchasing Nvidia chips; Beijing asserts that their domestic AI processors have reached equivalence with H20 and RTX Pro 6000D models.
In a significant move, China's semiconductor industry is gearing up for a potential revolution, with a heightened focus on domestic system building that could have far-reaching implications for the future.
The executive's statement suggests a sense of urgency in this domestic system building effort, with the message now "loud and clear" that companies should prioritize building a homegrown system. This shift towards self-reliance is seen as a response to the ban on Chinese tech companies from purchasing Nvidia's AI chips.
Beijing believes that homegrown AI chip makers, such as Huawei and Cambricon, now produce chips that have comparable performance to Nvidia's China-only products. In anticipation of the glut of orders from companies needing AI chips but unable to procure Nvidia products, China's chip makers are ramping up production.
The Cyberspace Administration of China (CAC) has banned Chinese tech companies, including ByteDance and Alibaba, from buying Nvidia's AI chips. This ban, coupled with the subsequent focus on domestic system building, indicates a long-term strategy by the central government.
The initial reception for the more affordable AI China-specific GPU was lukewarm, but it turns out that the central government was blocking the purchase of these graphics cards. The ban and the subsequent focus on domestic system building could potentially lead to increased competition for foreign tech companies in the Chinese market.
Other Chinese tech giants like Tencent are pushing to build their own infrastructure to replace Nvidia's software stack. Chinese chip manufacturers such as SMIC (Semiconductor Manufacturing International Corporation) and other domestic companies have increased their production of AI chips in response to the ban on Nvidia products and the resulting higher demand for locally made AI chips, driven by policies from the Cyberspace Administration of China restricting foreign chip usage.
However, the search results did not explicitly name specific Chinese companies increasing production directly because of the Nvidia ban. It is known that China is pushing domestic chipmakers to fill this gap.
Nvidia's CEO Jensen Huang expressed disappointment about the situation but is understanding of the larger agendas between China and the US. Some believe that Beijing is making these moves to get a more favorable deal from the US in trade negotiations, especially as export approval for its Blackwell-based B30 chips is still up in the air.
Some Chinese industry leaders believe this move by the central government is an effort to break free from American technology and boost its homegrown semiconductor industry. This new ban comes just weeks after companies were directed to stop ordering Nvidia H20 chips as well.
As the situation unfolds, it remains to be seen how this shift towards domestic system building will impact the Chinese semiconductor industry and its relations with foreign tech companies. However, one thing is certain: the future of China's semiconductor industry is poised for significant change.
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