Beijing: China has introduced new rules that stop the use of foreign-made artificial intelligence (AI) chips in all state funded data centres. The decision is part of the country’s wider plan to strengthen its control over key technologies and reduce its dependence on American chip makers such as Nvidia, AMD, and Intel.

According to reports, Chinese authorities have instructed that new data centre projects receiving government money must use only chips produced by local manufacturers. Projects that are less than 30 percent complete must replace any foreign chips already installed or cancel planned purchases. Those that are further along in development will be reviewed on a case-by-case basis.

The move is seen as another step in China’s long-term goal of achieving self-sufficiency in AI technology. The government has been promoting local semiconductor companies such as Huawei, Cambricon, and Moore Threads to develop advanced chips that can match foreign performance standards.

To encourage this transition, China is also offering energy cost reductions and other financial support for data centre projects that use domestic chips. Some major technology companies are expected to benefit from these incentives as the country builds more AI infrastructure using locally produced hardware.

However, the decision could deal a serious blow to foreign chip makers, especially Nvidia, which previously held a dominant position in China’s AI market. Analysts say that China’s policy could further deepen the ongoing technology divide between Beijing and Washington.

The United States has also tightened export controls on high-end AI chips, restricting their sale to China. Earlier this week, President Donald Trump reaffirmed that advanced Nvidia chips such as the Blackwell series will remain reserved for U.S. use only.

Experts believe the latest ban highlights China’s determination to develop its own semiconductor ecosystem, even if it means facing short-term challenges in performance and cost. They warn, however, that the transition may take time as domestic chips still lag behind foreign competitors in processing power and efficiency.

For now, China’s focus remains clear building a secure and self-reliant AI infrastructure powered entirely by homegrown technology. The new rule marks another milestone in the country’s drive toward technological independence amid global tensions over advanced chip manufacturing.