A survey of 60 Chinese executives shows firms are reducing Nvidia AI accelerator purchases and plan to allocate 46% of their AI chip budget to domestic alternatives within the next 12 months, up from 30% currently. This shift signals a major realignment in the global AI hardware supply chain, driven by China's data center investment plan and geopolitical tensions, which could significantly impact Nvidia's revenue and accelerate domestic chipmakers like Hygon and Cambricon. China plans to invest roughly 2 trillion yuan ($275 billion) in data centers over the next five years, with at least 80% of core technology sourced domestically, benefiting companies such as Tencent, Alibaba, Huawei, Hygon, and Cambricon.
Background
The survey reflects the ongoing impact of U.S. export controls on advanced Nvidia chips to China, prompting a push for self-sufficiency in AI accelerators. Hygon and Cambricon are two prominent domestic chip designers: Hygon produces CPUs and AI accelerators using x86-compatible designs, while Cambricon focuses on AI chips for cloud and edge computing. Both have seen significant market growth amid the shift.