Китайские authorities are examining the use of Broadcom's hardware in state-backed data centres amid a drive to boost domestic producers and reduce reliance on foreign AI infrastructure. China's State-owned Assets Supervision and Administration Commission (Sasac) has been surveying the number of Broadcom switches in state-controlled data centres in recent weeks, according to two people familiar with the survey. The survey found that the penetration rate of Broadcom switches among state-owned companies could be as high as 90 per cent.

The initial findings could lead Sasac to issue informal guidance to reduce the use of Broadcom switches in domestic data centres. Rising demand for AI training among Chinese companies means data centre switches represent a growing market that could be worth billions of dollars in sales for local suppliers. Sasac is surveying whether Broadcom has used its position as market leader to bundle other products or impose large purchase requirements for up to tens of thousands of switch chips.

Broadcom's alleged approach means Chinese companies such as H3C Technologies and Ruijie Networks have had limited ability to order from other switch makers such as Huawei. Industry experts say that Huawei's switches are less energy efficient than those made by Broadcom, which adds to users' electricity costs. Sasac, Broadcom, H3C and Ruijie did not respond to requests for comment.