China To Provide Large-Scale Subsidies For Local AI Chips, Encouraging Domestic Adoption

China has implemented a new measure to promote in-house AI chip production, providing subsidies to potential buyers.

It is evident at this point that China has started to shift its approach to the AI segment. Instead of relying on international firms like NVIDIA, Intel & AMD, the nation has decided to go its own way, prioritizing domestic production of AI chips through every means possible. Reuters reports that Beijing City has agreed to provide customers of homegrown AI chips with subsidies, and the local government will financially support a certain amount of the total investment, with the sole aim of promoting domestic products over others.

Well, this is one of the ways China plans to become a self-sustained nation in the domain of AI semiconductors since Beijing has realized that the US sanctions have hit them hard, and the only way to combat it is through looking for alternatives, preferably local ones. Speaking of regional solutions, let's quickly dive into what Chinese companies offer for the AI markets, starting with Huawei.

Companies that purchase domestically controlled GPU chips for intelligent computing services will receive support based on a certain percentage of their investment.

- Beijing Municipal Bureau of Economy and Information Technology via Reuters

Huawei is a firm that has stood tall against the vigorous US policies, whether it is in the mobile markets now or even in AI computing. The company's Ascend 910B AI chip has made huge strides in the markets, not because it's a local solution, but because the performance the chip has brought onboard has attracted several clients. It was reported in the past that Chinese companies have refused to buy any of NVIDIA's new AI GPUs as they see domestic alternatives as much better choices, with Huawei being a top contender simply because of the company's reputation and the quality it has brought into the markets. Huawei is also planning to commence in-house production of HBM memory which will be a key development for China's AI industry.

Apart from Huawei, firms like Alibaba and Tencent have also developed their custom AI solutions, but they are relatively older, which means they haven't seen much of the market's adoption. Underdogs like BirenTech and Moore's Threads have come up with attractive AI chips as well, and it's only a matter of both time and development before we see such companies emerge into mainstream markets.

1st Tier "Technology" Companies:

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With US companies having a confined business in China, it will be interesting to see how huge of an impact the local AI markets face since it's inevitable that despite being ambitious, the lack of cutting-edge computing power will hurt the Chinese firms.