China Bans Foreign AI Chips in Government Projects; Nvidia Shifts Focus to India’s Deep-Tech Ecosystem
China has banned the use of foreign AI chips in new data centers. This move has dealt a major blow to American tech company Nvidia, after which the company is now making a fresh start in India through the 'India Deep Tech Alliance'.
In a major decision, China has banned the use of foreign artificial intelligence (AI) chips in all new government-funded data center projects. According to a Reuters report, the Chinese government has directed that data center projects less than 30% complete remove or cancel purchases of foreign chips.
This ban has dealt a major blow to American chip companies like Nvidia, whose chips, such as the H20, B200, and H200, were very popular in China. Nvidia had a 95% share of the Chinese market by 2022, but that has now virtually disappeared. Nvidia CEO Jensen Huang recently stated in an interview with Citadel Securities that he is now completely exiting the Chinese market, reducing his business to zero percent.
According to the report, this move will strengthen China's domestic semiconductor companies, but it could further widen the gap in AI computing capabilities between the US and China. Former US President Donald Trump also recently stated that the US would allow China to deal with Nvidia, but not for "the most advanced chips."
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Meanwhile, Nvidia CEO Jensen Huang has adopted a new strategy and turned to India. The company has now joined the 'India Deep Tech Alliance,' a group of Indian and US investors focused on funding deep-tech startups in South Asia. The alliance launched in September 2025 with an initial fund of $1 billion. Its objective is to support startups in sectors such as space, semiconductors, artificial intelligence, and robotics.
Nvidia has raised $850 million in capital through this alliance, with the alliance launching in September 2025 with an initial fund of $1 billion. New investors include Qualcomm Ventures, Activate AI, InfoEdge Ventures, Chirate Ventures, and Kalaari Capital.
Under this initiative, Nvidia will provide technical support, training, and AI computing tools to Indian deep-tech startups. This move is in line with the Indian government's $12 billion R&D program launched to promote domestic technology development.
According to Nasscom data, deep-tech startup funding in India grew 78% to $1.6 billion in 2024, and this Nvidia partnership could help further accelerate this momentum.
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