Restrictions on U.S. chip exports are beginning to force visible shifts in China’s AI compute strategy, as a shortage of Nvidia accelerators drives cloud providers toward domestic alternatives. According to new reporting by The Wall Street Journal, supply has become tight enough that government officials are now overseeing allocation of remaining high-end parts, prioritizing homegrown options like Huawei’s Ascend series for training and inference workloads. The impact is reportedly most visible in China’s public cloud and state-funded data center projects, which are now formally barred from using foreign AI chips. The directive follows earlier efforts by Beijing to promote domestic hardware through subsidies and procurement preference, but the latest guidance is more absolute. Chinese developers are rewriting code and restructuring workloads to run on domestic accelerators like Huawei’s Ascend 910B and 910C, as a result, which are less powerful than Nvidia’s latest GPUs.

Full report : The Chinese government is intervening in how SMIC distributes its chip output for AI, prioritizing Huawei amid US export restrictions on advanced chips.