The Chinese government is stepping up pressure on Chinese companies to buy locally produced artificial intelligence chips instead of Nvidia (NVDA) products as part of the nation’s effort to expand its semiconductor industry and counter U.S. sanctions, people familiar with the matter told Bloomberg’s Pei Li, Mackenzie Hawkins and Debby Wu. Chinese regulators have been discouraging companies from purchasing Nvidia’s H20 chips, which are used to develop and run AI models, but the policy has taken the form of guidance rather than an outright ban, the report stated. Shares of Nvidia are down 3.5% in afternoon trading.