china tells its tech companies they can’t buy ai chips from nvidia 

Nvidia Faces Market Exclusion in China

Nvidia has recently experienced a significant setback, being effectively barred from the Chinese market. This restriction originates not from U.S. governmental actions, but from a decision made by Chinese authorities.

China's Regulatory Action

The Cyberspace Administration of China, the nation’s internet regulator, issued a ban on Wednesday prohibiting domestic technology firms from procuring Nvidia’s AI chips. This information was initially reported by the Financial Times.

Furthermore, the agency directed companies such as ByteDance and Alibaba to cease both the testing and ordering of the RTX Pro 6000D server. This particular device was engineered specifically for the Chinese market.

Previous Discouragement of Nvidia Chip Purchases

Prior to this outright ban, Beijing had already signaled its preference for domestically produced alternatives by discouraging companies from purchasing Nvidia chips in late August.

Impact on China's Tech Sector

This new prohibition is anticipated to have a considerable impact on China’s technological landscape. While companies like Huawei and Alibaba are developing their own AI chips, Nvidia remains the dominant global leader in this field.

Nvidia’s chips are widely regarded as being among the most technologically advanced currently available.

Jensen Huang's Response

Responding to inquiries, Nvidia CEO Jensen Huang offered the following statement during a press conference on Wednesday: “Our services are only available to a market if the governing country desires our presence.”

Huang further expressed his disappointment, acknowledging broader geopolitical considerations between China and the United States. He conveyed patience and a continued willingness to support both the Chinese government and Chinese companies, contingent upon their needs.

U.S. Restrictions and Reversal

The Trump administration initially imposed licensing requirements on semiconductor companies, including Nvidia, for sales of AI chips to China in April.

During Nvidia’s first-quarter earnings call, Huang indicated an anticipated revenue loss of $8 billion in the second quarter alone due to the inability to sell its H20 AI chips within China.

Exclusion from Forecasts and Subsequent Developments

In June, Nvidia announced that China would be excluded from its future profit forecasts, effectively acknowledging its market exclusion.

However, in July, the Trump administration reversed its stance, granting semiconductor companies permission to resume chip sales to China.

In August, the White House announced the licensing approvals necessary for these sales, but stipulated that the U.S. government would retain 15% of the revenue generated from the chips.

Delayed Implementation and Current Status

As of Nvidia’s most recent earnings report, the company had not yet completed any sales to Chinese customers under this new arrangement, citing the slow implementation of President Trump’s proposal.