China has banned its leading tech firms from buying chips from Nvidia as the country ramps up domestic manufacturing.
The Financial Times reported that the country’s internet regulator, the Cyberspace Administration of China (CAC), told tech giants, including ByteDance, the owner of TikTok, and the e-commerce giant Alibaba, to end testing for an AI chip that the Santa Clara, California-based chip giant made explicitly for the Chinese market.
Nvidia CEO Jensen Huang said he was “disappointed” by the report.
“We will continue to be supportive of the Chinese government and Chinese companies as they wish,” he said at a news conference in London.
Several companies had indicated they would order tens of thousands of the RTX Pro 6000D chips and had started testing and verification work with Nvidia’s server suppliers.
Despite the tests, there was limited demand for the chip in China with major tech giants there opting not to use the chip in their products, according to a report from the Reuters news agency earlier this week.
On Wall Street, Nvidia’s stock tumbled over the ban in the world’s second largest cloud computing market. As of 11:30am in New York, (15:30 GMT), it was down 2.6 percent.
Escalating tensions
The ban comes days after the Chinese government accused the company of violating its antimonopoly law, which was focused on the H20 chip, a previous version that was also explicitly designed for the Chinese market.
It also comes as the United States and China wrapped up their latest round of trade talks in Madrid this week, which led to the White House announcing private parties would take over TikTok’s US operations, leaving parent company ByteDance with a minority stake.
Successive US administrations have restricted China’s access to advanced chips, prompting Beijing to press domestic firms to turn away from US suppliers to the detriment of industry leaders like Nvidia.
Huang is in London at the same time as US President Donald Trump’s state visit there as Nvidia is set to supply the United Kingdom arm of Stargate, a Trump-backed AI infrastructure project led by OpenAI, with tens of thousands of processor chips as it builds data centres.
Huang said he expects to discuss the escalation with the president at a state banquet on Wednesday evening.
“I’ll see him tonight, and he’ll probably ask me,” Huang said when he was asked if he had spoken to Trump about the developments.
Huang stressed that the cloud computing giant will be “supportive” of both countries as they “sort through these geopolitical policies”.
