China bans foreign AI chips from state-funded data centers, sources say

STORY: The Chinese government has clamped down on foreign-made AI chips being used in the country's data centers.That's according to two sources close the matter.They said Beijing issued guidance on new data center projects that have received any state funds.They're now required to use only domestically-made AI semiconductors.Chinese regulators have reportedly ordered such data centers that are less than 30% complete to remove all installed foreign chips, or cancel plans to purchase them.The sources added projects in a more advanced stage will be decided on a case-by-case basis.The move could be one of China's most aggressive steps to remove foreign technology from its critical infrastructure, and to achieve AI chip self-sufficiency.China's access to advanced AI chips, including those made by Nvidia, has been a key point of friction with the Washington.U.S. President Donald Trump said Sunday the U.S. will "let China deal with Nvidia but not in terms of the most advanced" chips.It followed talks with Chinese President Xi Jinping last week.The latest move by Beijing would hurt Nvidia's hopes of regaining Chinese market share.It also gives local rivals like Huawei another chance to gain more chip sales.The sources said it's unclear whether the guidance applies nationwide or only to certain provinces.They also didn't identify which Chinese regulatory bodies had issued the order. Foreign chipmakers that sell data center chips to China include AMD and Intel, as well as Nvidia.Two of Beijing's most powerful regulators didn't respond to requests for comment.While Nvidia and AMD didn't respond, and Intel declined to comment.

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