In a dramatic surge, Chinese artificial intelligence (AI) chip designer Cambricon Technologies Corp. reached its daily trading limit of 20% on Monday, sparking a sector-wide rally. This sudden upswing follows reports that Beijing is intensifying its efforts to persuade domestic companies to abandon Nvidia Corp.’s processors in favor of locally developed alternatives.
As the largest publicly traded AI chip designer, Cambricon led the charge, with its shares experiencing heavy trading. Other chipmakers, including Semiconductor Manufacturing International Corp. and Naura Technology Group Co., also saw significant gains, with the former surging nearly 20% in Shanghai and the latter climbing 9%.
According to sources, Chinese regulators have been quietly discouraging companies from purchasing Nvidia’s H20 chips, which are crucial for developing and running AI models. While this guidance falls short of an outright ban, it reflects Beijing’s desire to promote domestic AI chipmakers and prepare local companies for potential future US trade restrictions.
This move is part of China’s broader strategy to achieve self-sufficiency in critical technologies. Earlier this year, Beijing instructed local electric-vehicle manufacturers to increase their reliance on domestic chip suppliers, underscoring its commitment to reducing dependence on foreign technology.
Nvidia’s shares, meanwhile, fell 2% on Friday, reflecting the potential impact of China’s shift towards local AI chipmakers. As the world’s second-largest economy continues to assert its technological ambitions, the ripple effects are likely to be felt across the global semiconductor industry.
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