Chinese executives plan to route 46% of their AI accelerator budgets to domestic chips over the next 12 months, up from 30% today, according to Bloomberg Intelligence. Nvidia could face growing pressure in a market planning $294 billion in data-center spending.
Nvidia could lose ground in China as local companies redirect AI chip spending toward homegrown alternatives. Bloomberg Intelligence reported on Tuesday that Chinese executives expect to allocate 46% of their AI accelerator budgets to domestic products over the next 12 months, up from 30% today. The report suggests Beijing's push to replace American technology may be gaining traction.
Who benefits from the shift
Tencent Holdings, Alibaba Group Holding, and Huawei Technologies, all key players in China's AI infrastructure buildout, appear well positioned to gain from the transition. The survey of 60 executives also found that accelerators from Hygon Information Technology and Cambricon Technologies are being evaluated by a large pool of respondents. Meanwhile, 80% of executives said total infrastructure spending is running over budget this year, mostly because of high AI-related project costs.
Why the money matters for Nvidia
The scale of China's plans raises the stakes for anyone trading the stock market. China is planning roughly 2 trillion yuan, or $294 billion, in data-center investment over the next five years, with at least 80% of core technologies such as chips expected to come from domestic suppliers.
Nvidia's products remain popular, but its market share is expected to shrink as H20 chips become harder to find and Beijing urges tech firms not to use them. A global memory-chip shortage may cap growth for Chinese AI firms such as Semiconductor Manufacturing International Corp. and possibly benefit ChangXin Memory Technologies.
Source: GuruFocus
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