China is helping cut energy bills by up to half for some of the largest data centers using domestic chips rather than foreign ones, the Financial Times reported. The subsidies from local governments come as tech giants like Alibaba, Baidu, and Tencent faced higher electricity costs after Beijing in September banned certain Nvidia chips, which are more energy-efficient than their Chinese counterparts.
Chinese companies have in recent years been iced out by US export restrictions, and now Beijing is adding its own controls. The country banned foreign AI chips for new data center projects that have received any state funds, Reuters reported Wednesday. The efforts attempt to boost Chinese tech firms’ reliance on its own semiconductor sector even when it slows development or increases costs. They emphasize Beijing’s willingness to sacrifice short-term gains for long-term independence of foreign products.
They also act as a warning and lesson for other countries as sovereign tech becomes a national rallying cry. France similarly helped Mistral with its data center buildout, and the US is attempting to do the same for domestic companies but is getting bogged down by debates around export controls and regulations, rather than incentives.