Key Takeaways
- China mandates state-funded data centres to use domestic AI chips, banning foreign semiconductors.
- Nvidia’s Chinese market share has plummeted from 95% in 2022 to zero currently.
- Nvidia joins India Deep Tech Alliance with $850 million funding, pivoting to Indian market.
China has officially mandated that all new state-funded data centre projects must use domestic artificial intelligence chips, effectively banning foreign semiconductors like Nvidia’s H20, B200, and H200 models. The government has ordered partially built data centres (less than 30% complete) to remove all foreign-made chips or cancel purchase plans, while advanced projects will be evaluated case-by-case.
This move dramatically impacts Nvidia’s position in China, where the company’s market share has dropped from 95% in 2022 to zero currently. The ban threatens to widen the AI computing power gap between the US and China as the country pushes for technological self-reliance.
Former President Donald Trump recently stated the US would “let China deal with Nvidia” while restricting advanced chip exports.
Nvidia’s Strategic Shift to India
As China closes its doors, Nvidia is pivoting to India. The Jensen Huang-led company has joined the ‘India Deep Tech Alliance,’ a coalition of Indian and US investors funding deep-tech startups across South Asia.
The alliance has secured over $850 million in capital commitments to address funding gaps, with new members including Qualcomm Ventures, Activate AI, InfoEdge Ventures, Chirate Ventures and Kalaari Capital.
Launched in September 2025 with a $1 billion initial commitment, the alliance focuses on sectors including space technology, semiconductors, artificial intelligence, and robotics. Nvidia will provide technical guidance, training, and policy support to help startups adopt its AI and computing tools.
This strategic move aligns with India’s $12 billion research and development program and comes amid surging deep-tech investment – funding jumped 78% to $1.6 billion last year according to Nasscom data.
