China's Cyberspace Administration of China (CAC) has prohibited domestic technology firms from acquiring Nvidia AI chips, instructing major companies including ByteDance and Alibaba to cease testing and ordering Nvidia's RTX Pro 6000D server. The directive, initially reported on Wednesday by the Financial Times, represents an escalation in China's efforts to promote domestic semiconductor alternatives.
This new restriction follows a period of Beijing discouraging companies from purchasing these chips, a policy that began in late August. The move is expected to significantly impact China's domestic tech ecosystem, which has relied on Nvidia's advanced AI chips. Nvidia is recognized as a global leader in the AI chip market, with its products considered among the most sophisticated available.
Nvidia CEO Jensen Huang addressed the development in a press conference on Wednesday, stating, "We can only be in service of a market if a country wants us to be." Huang added, "I'm disappointed with what I see but they have larger agendas to work out between China and the United States. And I'm patient about it. We'll continue to be supportive of the Chinese government and Chinese companies as they wish."
The current ban follows a series of fluctuating export policies impacting semiconductor companies. The Trump administration had previously imposed licensing requirements on AI chip sales to China in April. Nvidia subsequently projected an $8 billion revenue loss in its second quarter due to restrictions on its H20 AI chips and announced in June that it would exclude China from its future profit and revenue forecasts. While the administration later reversed course in July, granting permission for chip sales with a subsequent August announcement to collect 15% of the revenue, Nvidia reported that the slow implementation of this proposal had prevented any units from being sold to Chinese customers under the revised terms.
