Nvidia has just been shut down from the Chinese market. This time, it was replaced by the Chinese government instead of the US.
China’s internet regulator, China’s cyberspace management, has banned domestic tech companies from purchasing 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 for the Chinese market.
Beijing previously discouraged businesses from purchasing these chips in late August, instead promoting alternatives from local manufacturers.
This ban will hit China’s technological ecosystem quite a bit. While companies such as Huawei and Alibaba design AI chips are locally located, Nvidia is a global market leader and its chips are considered to be some of the most advanced in the market.
When asked for comment, Nvidia provided the following statement from Huang at a press conference Wednesday:
“We can only serve the market if our country wants us,” Fan said. “I’m disappointed with what I’m seeing, but they have a bigger agenda to work out between China and the US. And I’ll be patient about it. We’ll continue to support the Chinese government and Chinese companies the way they want.”
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The Trump administration struck semiconductor companies, including NVIDIA, and in April there was a licensing requirement to sell AI chips in China.
Huang said Nvidia could withstand a $8 billion revenue loss after it was unable to sell H20 AI chips in China in the second quarter alone and could not sell it on its first quarter revenue call.
In June, Nvidia said it would not include China in its future profits and forecasts as it was essentially locked out of the market.
In July, the Trump administration reversed the course and gave the semiconductor company the green light to sell chips again in China. In August, the White House announced that it would grant the license required for sales in China, but catch: The US government will earn 15% of its revenue from chips sold. However, at the time of Nvidia’s latest revenue, the company had not yet sold units to Chinese customers under the plan, citing the slow implementation of President Trump’s proposal.
