U.S. Chipmakers Face Headwinds as China Restricts Foreign AI Chips

Chinese authorities have tightened controls on state-funded data centers, mandating the removal of foreign-made artificial intelligence chips. The policy targets projects with less than 30% completion, forcing them to either scrap non-domestic chip purchases or replace installed units. For more advanced projects, approvals will be assessed case by case.

The move directly impacts U.S. semiconductor giants Nvidia (NVDA), Advanced Micro Devices (AMD), and Intel (INTC), which rely on China as a key export market. This development follows recent U.S.-China trade tensions, now extending into the strategic AI chip sector. Nvidia's Blackwell chips, its most advanced AI processors, have already been flagged as non-exportable by former President Trump.

Market observers note the escalating tech cold war could accelerate China's domestic chip development while forcing U.S. firms to diversify supply chains. The AI chip sector remains a critical battleground in global economic leadership, with both nations vying for supremacy in next-generation computing.