China has boosted subsidies for major data centers, slashing their energy bills by up to 50% to support domestic chipmakers and strengthen global competitiveness, according to a report.

Chinese Tech Giants Grapple With High Energy Costs

Several local governments in provinces with a high concentration of data centers, such as Gansu, Guizhou, and Inner Mongolia, have introduced these incentives, the Financial Times reported on Tuesday.

These cater to tech behemoths like ByteDance, Alibaba Group Holding Ltd. (NYSE:BABA), and Tencent Holdings Ltd. (OTC:TCEHY) as these firms have been dealing with soaring electricity costs due to Beijing’s prohibition on buying AI chips from Nvidia Corporation (NASDAQ:NVDA).

Industry insiders revealed that the subsidies were introduced after tech firms raised concerns over the higher costs of using less efficient domestic chips from Huawei and Cambricon, according to the report.

Despite ...