BEIJING city authorities have announced subsidies for firms that purchase domestically produced artificial intelligence (AI) chips, as China seeks to develop its semiconductor industry and reduce reliance on foreign technology.

The sizes of subsidies were not specified in a document outlining the initiative by the Beijing Municipal Bureau of Economy and Information Technology dated Apr 24.

“Companies that purchase domestically controlled GPU chips for intelligent computing services will receive support based on a certain percentage of their investment,” the document showed, referring to chips known as graphics processing units (GPUs).

Under the initiative, the city targets 100 per cent self-reliance in smart computing infrastructure hardware and software by 2027.

Achieving self-sufficiency in AI chips, which are essential for training AI models, has become an urgent task for China as the US tightens restrictions on exporting advanced computing products to the country citing national security concerns.

Restrictions announced by the US Department of Commerce late last year prevented exports to China of advanced chips such as the A800, H800 and H100 from market leader Nvidia.

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China is cultivating its own AI chip industry in which the Ascend 910 chips of Huawei Technologies are widely seen as a potential alternative to products from US rival Nvidia.

Government-related entities, known as “intelligent computing centres”, have been the major buyers of domestic AI chips. REUTERS