Nvidia has been shut out of the Chinese market, this time by the Chinese government. The Cyberspace Administration of China has banned domestic tech companies from purchasing Nvidia AI chips. The regulator also instructed major tech firms, including ByteDance and Alibaba, to immediately stop testing and ordering Nvidia’s RTX Pro 6000D server, a device specifically designed for the Chinese market. This move follows a previous discouragement from Beijing in late August, when the government urged companies to avoid these chips and instead promote alternatives from local manufacturers.
This ban is expected to deliver a significant blow to China’s own tech ecosystem. While companies like Huawei and Alibaba design AI chips locally, Nvidia remains the global market leader. Its chips are widely considered to be among the most advanced available.
When asked for comment, Nvidia provided a statement from CEO Jensen Huang at a press conference. Huang expressed disappointment, stating, “We can only be in service of a market if a country wants us to be. They have larger agendas to work out between China and the United States. I’m patient about it. We’ll continue to be supportive of the Chinese government and Chinese companies as they wish.”
This action by China follows a series of regulatory challenges from the United States. The Trump administration first hit semiconductor companies, including Nvidia, with licensing requirements to sell their AI chips in China back in April. On a subsequent earnings call, Huang stated Nvidia was preparing to endure an eight billion dollar revenue loss in the second quarter alone from being unable to sell its H20 AI chips there. By June, Nvidia said it would exclude China from its future profit and revenue forecasts as it was essentially locked out of the market.
The situation shifted in July when the Trump administration reversed course and gave semiconductor companies the green light to resume chip sales in China. Then in August, the White House announced it would grant the necessary licenses with a stipulation: the U.S. government would receive fifteen percent of the revenue from all chips sold. However, as of Nvidia’s latest earnings report, the company had not sold any units to Chinese customers under this new plan, citing the slow implementation of the proposal.