In a surprising turn of events in the tech world, China's leading AI chip designer, Cambricon Technologies Corp., saw its stock soar the maximum permissible daily rise of 20%. This surge follows reports that Beijing is nudging domestic firms to switch from using Nvidia Corp. chips to locally produced alternatives, as part of a strategic shift to bolster home-grown technology sectors.

The impetus for this sudden market movement was a Bloomberg report confirming that Chinese authorities are encouraging local companies to gradually reduce their dependency on Nvidia's chips, which are crucial for developing and running AI models. While this is not an outright ban, the guidance serves as a preparatory step for potential further US sanctions and aligns with China's goal of technological self-reliance.

Cambricon's rise wasn't an isolated incident. Semiconductor Manufacturing International Corp. and Naura Technology Group also experienced significant gains, riding the wave of governmental endorsements aimed at securing a robust domestic chip industry free from international market constraints.

Amidst these developments, Nvidia shares slightly dipped, as the American company stands to lose a significant share of the Chinese market. The move by Beijing underlines the ongoing tech rivalry between the US and China, highlighting each nation's drive to control and innovate within pivotal tech industries.

Simultaneously, China has extended its local preference policy to other industries, urging electric vehicle manufacturers, for example, to rely more on domestic sources for their chip needs—a clear nod to the broader strategy of reducing foreign dependency across critical sectors.

As the dynamics unfold, the global semiconductor market is watching closely, aware that shifts in China's policies might not only reshape the tech landscape domestically but could also send ripples throughout global supply chains, affecting competitors and collaborators alike. Investors and stakeholders are keen on how these developments could redefine competitive structures and influence future innovation trajectories in AI technology.