China has issued new guidance requiring state-funded AI data center projects to exclusively use domestically produced chips, a major blow to foreign suppliers like AMD, Nvidia, and Intel. The directive instructs projects that are less than 30% complete to halt and replace any foreign-made components. This move is one of Beijing's most assertive steps towards technological self-sufficiency and aims to reduce reliance on American technology amid ongoing trade tensions. The new rules could effectively shut AMD out of one of its most important markets, where state funding has poured over $100 billion into AI data center projects since 2021. The full scope of the mandate is not yet clear, specifically whether it applies nationwide or only to certain provinces. This action creates significant uncertainty for AMD's future business in the region and is expected to create new opportunities for domestic Chinese chipmakers like Huawei Technologies.