Beijing’s local government has introduced a subsidy plan to help local businesses buy Chinese semiconductors, especially GPUs, aiming to strengthen its computing capabilities and lessen reliance on foreign tech. This initiative comes as part of a broader effort to enhance the city’s smart computing capabilities by 2027.
Under the undisclosed subsidy scheme, local firms will receive financial incentives to purchase domestically manufactured GPUs, with the subsidies being proportional to the investment required for building computing services. The policy focus emphasizes the use of domestic-designed and manufactured GPUs, essential for high-performance systems in data centers, particularly for AI development projects.
Recent changes to US export regulations have made it difficult for Chinese companies to get their hands on advanced AI processors and semiconductor manufacturing gear. US trade sanctions have restricted companies like Nvidia from exporting sought-after components to China, prompting Chinese entities to seek alternative solutions.
Beijing’s smart computing initiative aims to support the training of both general and industry-specific large language models (LLMs), crucial for AI development. Access to advanced computing resources, particularly GPUs, is essential for AI development, driving Beijing’s subsidy scheme to ensure self-sufficiency in this area by 2027.
China’s strategic shift to become self-sufficient in AI technology
China is shifting its strategy towards promoting domestic production of AI chips over-reliance on international firms like Nvidia, Intel, and AMD. The subsidy scheme reflects a broader national strategy to encourage the adoption of homegrown AI chips, ensuring self-sustainability in AI semiconductor technology despite external restrictions.
Leading players in the Chinese AI chip market include Huawei, Alibaba, Baidu, and Tencent, with Huawei making significant advancements in AI chip technology. Other emerging companies are expected to gain market share with time and further development.
Beijing’s initiative shows its commitment to technological self-sufficiency amid escalating trade tensions and US export controls. Financial incentives provided to local firms aim to accelerate the adoption of AI processors, bolstering Beijing’s computing infrastructure and reducing dependence on foreign technology.
In addition to traditional semiconductor technology, China is also targeting advancements in silicon photonics and quantum computing chips to achieve full self-reliance on smart computing infrastructure by 2027. However, geopolitical tensions and potential expansion of US-led export restrictions pose business risks for chip makers and equipment suppliers like ASML.
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