China, subsidies to reduce bills for those not using Nvidia Ai chips
Local government move to incentivise companies such as ByteDance, Alibaba and Tencent damaged by the trade war with the US
China has increased subsidies that reduce the energy bills of some of the country's largest data centres by up to half, a move that is part of Beijing's more general strategy to boost its domestic chip industry and compete with the United States.
This was revealed by the Fiancial Times, according to which local governments have strengthened incentives to help Chinese technology giants such as ByteDance, Alibaba and Tencent, which have suffered increased electricity costs following Beijing's ban on Nvidia's artificial intelligence chips.
The new subsidies come after several technology groups complained to regulators about the rising cost of using domestic semiconductors from companies such as Huawei and Cambricon, most of which are less energy efficient than Nvidia's.
Local governments in provinces with a high concentration of data centres, such as Gansu, Guizhou and Inner Mongolia, have responded by offering subsidies that reduce the electricity bills of large data centres by up to 50 per cent, provided they are powered by national chips.
Data centres that use chips from foreign suppliers such as Nvidia are not entitled to such facilities. This move is a further sign of how China is incentivising its technology companies to break their dependence on Nvidia and boost their domestic semiconductor industry, so they can compete with the US in the race for artificial intelligence.
