China officials overseeing allocation of high-end AI chips, prioritizing homegrown options — government's AI chip pivot accelerates as US export restrictions bite

China is shifting its AI compute strategy due to U.S. chip export restrictions, leading to a shortage of Nvidia accelerators and a push towards domestic options like Huawei's Ascend series. Chinese cloud providers and data centers are now mandated to use homegrown AI chips, with companies like Alibaba and Baidu transitioning to their own AI silicon. Some Chinese firms are finding ways around supply chain issues, while Chinese memory firms are exploring HBM production to support domestic accelerators. Nvidia is losing market share in China as the country pivots away from its products.