Shares in mainland Chinese firms related to AI, semiconductors and data centres rose to new highs on Monday after the country’s government said it planned to boost AI computing capacity by 40 percent this year.
The decision, which implies heavy spending by local governments to build out specialised data centre infrastructure, sent the AI Computing Power Concept Index to a record high.
The index, which is compiled by financial data provider Wind and comprises 54 component stocks, has increased 166 percent over the past year.
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AI push
Stocks related to AI chips had already received a boost late last week after AI start-up DeepSeek said it had changed its data format to allow its models to work better with domestically produced chips.
Shares in Cambricon Technologies, which makes AI chips that it touts as a potential alternative to Nvidia, received a boost from that news on Friday, as did those of SMIC and Hua Hong Semiconductor, China’s two biggest chip manufacturers.
Shanghai-listed Cambricon rose a further 11 percent on Friday. The company’s shares have jumped 447 percent over the past year on hopes that it could benefit from domestic AI chip demand.
Shenzhen Envicool Technology, which makes cooling systems for data centres, has seen its shares rise about 322 percent over the past year, while Zhongji Innolight, which makes transceiver modules for computing centres, has risen 180 percent.
Chip maker Hygon Information Technology and supercomputer manufacturer Dawning Information Industry have also shown similar gains.
In addition to government expenditures, domestic Chinese tech giants such as Baidu, ByteDance, Alibaba and Tencent are also spending heavily on AI data centre infrastructure.
The Chinese government has reportedly been urging companies to stay away from Nvidia chips and choose domestic providers instead, citing data security concerns, something that has fuelled additional hopes that domestic chip companies could cash in on AI expansion.
Nvidia has asked several suppliers to stop work on its H20 chips that were designed for the China market, The Information reported last week, apparently a response to demand concerns.
Domestic competition
China remains a major market for Nvidia, but the company’s share of the AI accelerator market declined last year even before a short-lived sales ban earlier in 2025.
In 2022 and 2023, Nvidia accounted for at least 85 percent of AI accelerator cards in China’s data centres, IDC China vice-president Zhou Zhengang was quoted as saying by China Business News in May.
Nvidia’s share dropped to 65 percent in 2024, and Zhou said he expected domestic suppliers to account for more than 40 percent of shipments in the first half of 2025.
In a “very short time”, Zhou said he expected domestic companies to become “mainstream” and take more than 50 percent of the market.