China Ditches Intel, AMD CPUs and Windows OS in Favor of ‘Safe and Reliable’ Homegrown Tech

The Chinese administration is gradually discontinuing the use of Intel and AMD CPUs, along with Microsoft’s Windows OS, as they do not align with its new ‘safe and reliable’ guidelines.

The relentless technological conflict between the globe’s biggest economies continues to intensify. From prohibiting specific AI chips to imposing restrictions on chip manufacturing equipment, both China and the US are adamant about denying each other access to their top-tier technology.

the Chinese government aims to replace US-based technology with locally produced alternatives.

The most recent development is from China, which intends to prohibit the use of Intel and AMD CPUs in government computers. Furthermore, it plans to gradually eliminate the use of Microsoft Windows. As per a Financial Times report (cited by Business Today), the Chinese government aims to replace US-based technology with locally produced alternatives.

These guidelines were issued to government officials on December 26 of the previous year, and implementation began this year. The Chinese government’s decision is driven by privacy concerns and the need to ensure that government systems are equipped with “safe and reliable” hardware and software.

The Financial Times report also mentions that “State-owned enterprises” have been notified that they will have to adhere to the same guidelines and transition their technology to Chinese providers by 2027.

In addition to addressing security concerns, the Chinese government’s decision will stimulate its domestic technology sector. This move can be perceived as a counteraction to similar steps taken by the US. The potential prohibition of TikTok is a recent instance of the escalating mistrust between the two nations.

China is a significant market for Intel, AMD, and Microsoft. Although the ban is limited to government procurements, all three companies are likely to experience a financial impact

China is a significant market for Intel, AMD, and Microsoft. Although the ban is limited to government procurements, all three companies are likely to experience a financial impact, the extent of which is yet to be determined. Reports suggest that China was Intel’s largest market in 2023, accounting for 27% of its $54 billion sales, and contributed to 15% of AMD’s $23 billion sales.

The Financial Times report suggests that it would be extremely challenging for either AMD or Intel to regain their place on the government’s approved hardware lists, as they would have to “submit their products’ complete R&D documentation and code.”

The world is heavily dependent on chips. Without them, virtually everything comes to a standstill. It’s not surprising that governments view cutting-edge chip technology not just as revenue generators, but as national security priorities. For instance, if a major earthquake were to strike Taiwan, global chip production would suffer a significant blow, affecting nearly every other sector of the economy.

The report did not mention a ban on Nvidia products, even though the US has restricted the sale of Nvidia’s most powerful AI hardware. Nvidia’s absence from the list could be interpreted as a sign that China’s domestic AI technology sector has not advanced enough to compete with US-sourced AI technology. However, it’s also reasonable to assume that government machines are unlikely to have discrete GPUs.