China Reportedly Bans Foreign AI Chips In State-Funded Data Centers In A Blow To Nvidia, AMD - Alibaba Gr Hldgs (NYSE:BABA), Advanced Micro Devices (NASDAQ:AMD)

Core Insights - Beijing has issued a directive banning foreign AI chips in state-funded data centers, reflecting the escalating U.S.-China tech war [1] - New data center projects under 30% completion must exclusively use domestically produced AI chips, with case-by-case evaluations for nearly completed projects [2] - China has increased subsidies for major data centers, reducing energy bills by up to 50% to support domestic chipmakers and enhance global competitiveness [3] Company Impacts - The directive may hinder Nvidia's efforts to regain market share in China while providing opportunities for domestic competitors like Huawei to boost chip sales [3] - Alibaba has introduced a new computing pooling system, Aegaeon, aimed at reducing reliance on Nvidia GPUs for AI models by 82% [4] - Nvidia's CEO remains optimistic about resuming sales in China but acknowledges the need to address U.S. national security concerns [5] Market Performance - Over the past year, shares of Nvidia, AMD, and Intel have seen significant increases, with Nvidia up 42.01%, AMD up 76.51%, and Intel up 58.79% [6]