Beijing:  China is providing major technology companies with cheaper electricity to strengthen its domestic artificial intelligence (AI) chip industry, according to a recent report by the Financial Times. The move aims to reduce the country’s dependence on foreign technology, especially from the United States.

Local governments across China are offering electricity discounts of up to 50 percent to large data centers operated by leading tech firms such as Alibaba Group, Tencent Holdings, and ByteDance. These facilities play a key role in powering the country’s AI research and chip development.

The incentives are part of a wider national strategy to promote homegrown chip innovation after the United States and other countries imposed restrictions on the sale of high performance chips like those produced by Nvidia. By cutting energy costs, Beijing hopes to help its tech companies expand their capacity to train large AI models and design competitive chips locally.

Industry observers say the plan highlights China’s determination to achieve greater independence in semiconductor production. Over the past year, companies like Huawei have made progress in producing advanced chips using domestic resources, even as export limits tightened on foreign suppliers.

However, the policy also raises questions about how sustainable the subsidies will be. Offering discounted power could strain local budgets, especially in provinces already facing financial pressure. Analysts warn that while the move may strengthen China’s AI sector in the short term, long term growth will depend on innovation and efficient production rather than subsidies alone.

The electricity support is another sign of China’s push to become a global leader in artificial intelligence and high technology. As the race for chip self sufficiency continues, other nations are expected to watch closely how Beijing’s latest efforts reshape the global technology landscape.