China subsidizes power for tech firms to boost domestic AI chip development, FT reports

China is reportedly providing subsidized electricity to domestic technology companies, cutting energy costs for some of the country's largest data centers by up to 50 percent to support the development of homegrown AI chips amid its technological competition with the United States, according to the Financial Times.

The subsidy program, implemented by local governments in energy-rich provinces such as Gansu, Guizhou, and Inner Mongolia, benefits Chinese tech giants including ByteDance, Alibaba (9988), and Tencent (0700) that have faced rising electricity costs after switching to domestic semiconductor alternatives following US restrictions on Nvidia AI chip exports to China.

The initiative comes after multiple Chinese tech companies complained to regulators about increased power consumption when using domestic chips from manufacturers like Huawei and Cambricon, prompting local governments to compete with energy subsidies and cash incentives to attract major data center projects to their regions.