China Examines Broadcom Hardware in State Data Centers as Beijing Pushes Domestic AI Infrastructure

Chinese authorities are examining the extent to which Broadcom hardware is used in state-backed data centers, in a move that could further pressure US technology suppliers as Beijing accelerates efforts to reduce dependence on foreign AI infrastructure.

The State-owned Assets Supervision and Administration Commission, or SASAC, which oversees China's state-owned enterprises, has in recent weeks surveyed the use of Broadcom switches across data centers controlled by state entities, the Financial Times reported on Wednesday, citing people familiar with the matter.

The review comes as China intensifies its push for technological self-sufficiency amid its broader rivalry with the United States. Beijing has increasingly focused on building domestic supply chains for semiconductors, artificial intelligence and other critical technologies, while providing support to smaller specialized companies designated as "little giants."

The reported review of Broadcom equipment suggests that the campaign is increasingly extending beyond chips and AI processors to the networking infrastructure that connects computing systems inside data centers.

According to the Financial Times report, the SASAC survey found that Broadcom switches could account for as much as 90% of networking equipment in use at some state-controlled data centers. The finding, if confirmed, would illustrate the extent of Chinese data centers' reliance on foreign networking technology even as Beijing seeks to localize the broader technology stack.

Based on the preliminary findings, SASAC may issue informal guidance encouraging state-run data centers to reduce their reliance on Broadcom switches, the newspaper reported. Such a move would form part of Beijing's "domestic chips for domestic use" campaign, which seeks to expand the adoption of Chinese-made semiconductors and AI technologies across the public sector.

The development could put Broadcom in an increasingly sensitive position in the Chinese market. The company is one of the major suppliers of high-end networking switches used to connect servers and computing infrastructure, alongside Nvidia and Huawei.

The networking layer has become more important as data centers scale up to support AI workloads. Training and running large AI models require vast numbers of processors operating together, making high-speed networking equipment a critical component of AI infrastructure.

That means restrictions on Broadcom's products could have implications beyond individual switches. A broader shift toward domestically produced networking equipment could accelerate the development and adoption of Chinese alternatives while reducing the role of US suppliers in one of the fastest-growing segments of data-center infrastructure.

China has already taken steps to restrict the use of some foreign AI hardware in state-backed facilities. Nvidia products have been barred from these data centers, according to the Financial Times report, while Broadcom's switches have continued to have a significant presence.

Beijing's efforts to reduce foreign dependence have moved toward controlling the entire technology ecosystem rather than focusing exclusively on advanced AI accelerators.

Huawei has emerged as a major domestic competitor in several parts of that ecosystem, while Chinese authorities have also backed specialized technology companies as part of a broader effort to develop local alternatives to US and other foreign suppliers.

For Broadcom, the reported survey represents another potential source of pressure in China at a time when geopolitical tensions have already reshaped the global semiconductor supply chain. US restrictions on advanced technology exports to China have encouraged Beijing to accelerate domestic alternatives, while Chinese measures have affected the operating environment for American technology companies.

The immediate significance of the SASAC review remains uncertain. The reported survey does not establish that China has decided to ban Broadcom switches from state-owned data centers, and the possibility of informal guidance to reduce their use has not been independently confirmed.

Still, the reported 90% figure highlights the scale of the transition Beijing could face if it attempts to replace foreign networking equipment across its state-controlled infrastructure. Moving away from an established technology supplier would require data centers to identify domestic alternatives, test compatibility, manage costs, and potentially upgrade or replace existing equipment.

The episode also underpins a broader shift in China's technology policy. Beijing's drive for self-sufficiency is no longer confined to producing advanced processors. It increasingly involves building a domestic technology stack spanning chips, servers, networking equipment, AI models and the infrastructure required to operate them.

The situation has resulted in a longer-term risk beyond individual export restrictions for US technology suppliers. Even where their products remain commercially available, government-led procurement policies could gradually reduce their presence in China's strategic technology infrastructure and create a larger domestic market for Chinese alternatives.