The Chinese government is phasing out Intel and AMD CPUs and Microsoft's Windows OS because they don't fit its new 'safe and reliable' guidelines

The ongoing and escalating tech war between the world's largest economies shows little sign of easing. Whether it's the banning of certain AI chips or restrictions on chip making equipment, China and the US really don't want the other side to have access to its best toys.

The latest escalation comes from China, which is seeking to ban the use of Intel and AMD CPUs in government computers. And not only that, it wants to phase out the use of Microsoft Windows too. According to a report from the Financial TImes (via Business Today), the Chinese governments is seeking to phase out the US sourced tech in favor of domestically produced options.

The guidelines were giving to government officials on December 26 last year, and they this year begun following those plans. The Chinese government cites privacy concerns and the desire to ensure government systems have "safe and reliable" hardware and software. 

The FT report also cites sources claiming that "State-owned enterprises" have also been informed they will need to follow the same guidelines, and will need to switch their technology over to Chinese providers by 2027.

Alongside security concerns, the Chinese government's decision will boost its domestic technology sector and it can be seen as a retaliation to similar moves by the US. The potential ban of TikTok is just the latest example of the growing distrust between the two countries.

China is a major market for Intel, AMD, and Microsoft. Though the ban only relates to government procurements, all three companies are sure to take a financial hit, though to what extent remains to be seen. It is reported that China was Intel's largest market in 2023, making up 27% of its $54 billion sales, and that the region made up 15% of AMD's $23 billion sales.

The FT report states that it will prove very difficult for either AMD or Intel to get back onto the government's approved hardware lists, as the companies would have to "submit their products' complete R&D documentation and code." 

The world runs on chips. Without them, everything pretty much grinds to a halt. Its no wonder that governments view cutting edge chip technology not just as cash cows, but as national security priorities. To take Taiwan as an example, should a major earthquake hit the island, global chipmaking would take a massive hit, with flow-on effects to just about every other sector of the economy. And if war should break out? Well, let's not go there.

The report did not mention a banning of Nvidia products, even though the US side has restricted the sale of Nvidia's most powerful AI hardware. Nvidia's absence from the list could be seen as an indicator that China's domestic AI technology sector has not progressed enough to compete with US sourced AI technology, although it's also fair to say that government machines are unlikely to sport discrete GPUs. 

Unless, y'know, there's an institutional culture of lunchtime Quake IV death matches.