China’s state-assets regulator, SASAC, is examining whether Broadcom pressured government customers into ordering tens of thousands of switch chips to cement its market position. A recent agency survey found that Broadcom networking equipment makes up as much as 90% of the hardware at some state-owned enterprises. These high-speed switches are critical AI infrastructure used to move data between accelerators during the training and inference of models.

Beijing may instruct state-backed data centers to reduce their reliance on the US chipmaker to accelerate domestic hardware independence, though private operators like ByteDance and Alibaba would be exempt. The review follows increasing supply chain volatility and the constraints imposed by US export controls on advanced semiconductors.