(Bloomberg) -- Chinese AI chipmaker Cambricon Technologies Corp. soared its 20% daily limit on Monday, leading a sector rally after Bloomberg News reported Beijing was stepping up pressure on domestic companies to ditch Nvidia Corp. processors for local alternatives.
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Cambricon, the biggest publicly traded designer of the chips that underpin AI development, gained the maximum allowed in heavy trading. The company led a clutch of chip firms that ranked among the biggest gainers on the benchmark CSI 300 index. Semiconductor Manufacturing International Corp. surged almost 20% in Shanghai, while gear maker Naura Technology Group Co. climbed 9%.
Chinese regulators have discouraged companies from purchasing Nvidia’s H20 chips, which are used to develop and run AI models, Bloomberg News reported late Friday. That policy has taken the form of guidance rather than an outright ban, as Beijing wants to avoid hamstringing its own AI startups and worsening tensions with the US.
The move is designed to help domestic AI chipmakers gain market share, while preparing local companies for any potential additional US restrictions. The country’s biggest makers of AI processors include Cambricon and Huawei Technologies Co. Nvidia shares fell 2% on Friday.
Earlier this year, Beijing also told local electric-vehicle makers to procure more of their supplies from local chipmakers, part of its campaign to reach self-sufficiency in critical technologies.
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