Nvidia just got shut out of the Chinese market — this time by the Chinese government instead of the US.
China’s internet regulator, the Cyberspace Administration of China, banned domestic tech companies from buying Nvidia AI chips on Wednesday, as first reported by the Financial Times.
The agency also told tech companies including ByteDance and Alibaba to stop testing and ordering Nvidia’s RTX Pro 6000D server, a device designed specifically for the market in China.
Beijing had previously discouraged companies from buying these chips in late August, instead promoting alternatives from local manufacturers.
This ban will deliver quite a blow to China’s tech ecosystem. While companies like Huawei and Alibaba design AI chips locally, Nvidia is by far the global market leader, and its chips are considered to be some of the most advanced on the market.
When asked for comment, Nvidia provided the following statement from CEO Jensen Huang at a press conference on Wednesday: “We can only be in service of a market if a country wants us to be,” Huang said. “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 Trump administration hit semiconductor companies, including Nvidia, with licensing requirements to sell their AI chips in China in April.
On Nvidia’s first-quarter earnings call, Huang had said Nvidia was going to endure $8 billion of revenue loss in the second quarter alone by not being able to sell its H20 AI chips in China.
In June, Nvidia said that it wouldn’t include China in its future profit and forecast as it was essentially locked out of the market.
In July, the Trump administration reversed course and gave semiconductor companies the green light to sell their chips in China again. In August, the White House announced it would grant the licenses needed to sell in China, but with a catch: the U.S. government would get 15% of the revenue from the chips sold. But as of Nvidia’s latest earnings, the company had yet to sell any units to Chinese customers under the plan, citing the slow implementation of President Trump’s proposal.
Source: https://techcrunch.com/