US Embargo Fuels China's $6B Plus Data Center Investment: Report

China has committed over 43.5 billion yuan ($6.12 billion) to build computing data centers as per Liu Liehong, head of China’s National Data Bureau, Reuters cites a state news agency at an industry conference in the southwestern city of Guiyang.

China’s move follows the U.S. semiconductor embargo on the country, which restricts the import of advanced artificial intelligence technology from companies including Nvidia Corp NVDA, Advanced Micro Devices, Inc AMD, and Micron Technology, Inc MU, citing national security concerns.

In 2022, Beijing launched plans to construct eight major data center hubs in western regions by tapping the region’s energy resources to transfer computing power to the economic hubs.

Also Read: Alibaba Q1 Earnings: Revenue Miss Amid Price War, Profit Beat, International Commerce and Cloud Segments Shine

As per Liu, the eight data center hubs have attracted over 200 billion yuan in total investment.

Recent reports indicated that Chinese AI developers bypass the U.S. embargo with blockchain technology to access advanced Nvidia chips. Chinese tech giants remain aggressive in their AI ambitions despite the sanctions.

Nvidia maintained that the China embargo had had no material impact as U.S. Big Techs keep splurging on their AI ambitions. Meanwhile, due to the restrictions, Chinese tech giants like Alibaba Group Holding BABA flagged a significant effect on their AI ambitions.

Nvidia quashed the second-quarter revenue consensus of $28.68 billion by posting a topline of $30.04 billion. Adjusted EPS of 68 cents beat the consensus of 64 cents.

Reportedly, China is looking to back up technology start-ups and other small companies using their intellectual property as collateral. The country also expressed solidarity with the domestic electric vehicle industry, a significant consumer of advanced semiconductor technology.

Price Action: NVDA stock closed lower by 2.10% at $125.61 on Wednesday.

Image via Shutterstock