China is throwing its weight behind its technology giants working on producing artificial intelligence chips, this time with significant cuts to their electricity bills, according to a report by the Financial Times.
Beijing is cutting energy bills by up to half for some of the country’s largest data centres, the FT said.
The move is in line with a larger push by local governments that have beefed up incentives to help Chinese tech giants such as ByteDance, Alibaba and Tencent in developing AI chips, the report said.
The move comes as China is tied in tense competition with the United States, with Washington enforcing a range of export bans to stem the flows of advanced technology to its biggest tech rival.
China’s Xi Jinping, meanwhile, is also pushing for the country to become self-sufficient in technology supply chains. Last month, Beijing banned its tech firms from purchasing Nvidia’s AI chips, saying they were a national security concern.
The move forces tech firms to work with less energy-efficient domestic chips made by firms like Huawei leading to increased energy costs, the FT explained.
The energy subsidies are part of China’s larger push to subsidise the manufacturing of AI chips. Last year, Beijing set up a nearly $50-billion fund to support and subsidise its AI and semiconductor industries. Its outlay for AI alone is expected to reach $98 billion this year.
Meanwhile, Chinese firms are expected to invest more than $70 billion in data centres next year, according to a note from Goldman Sachs on Tuesday. Their power demand is already on track to jump by 25% just this year.
Read the full report: Financial Times
- Vishakha Saxena
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