China Cuts Power Costs for Tech Giants to Boost Local AI Chip Production
China has slashed electricity bills for major data centers operated by ByteDance, Alibaba, and Tencent as part of a strategic push to promote domestic AI chip development. Provincial governments are offering subsidies of up to 50% for facilities using chips from Huawei and Cambricon, countering the fallout from U.S. tech restrictions.
The move comes as Chinese firms grapple with higher operational costs due to inferior local alternatives to banned Nvidia GPUs. Some subsidies now cover nearly a full year of power expenses, freeing capital for AI research and cloud infrastructure expansion. While Huawei's Ascend and Cambricon's offerings lag behind Nvidia's H100 in performance, Beijing views widespread adoption as critical for iterative improvement through real-world deployment data.
