It looks like China is not ready to do business with Nvidia. China’s internet regulator has banned the country’s biggest technology companies from buying Nvidia’s artificial intelligence chips, as Beijing steps up efforts to boost its domestic industry and compete with the U.S.
This ban marks a significant escalation in the country’s efforts to reduce reliance on foreign technology. This move comes as Chinese regulators assess that domestic semiconductor chips have now reached or surpassed the performance of Nvidia’s offerings. The ban aligns with China’s broader strategy to promote homegrown chip development amid rising geopolitical tensions and ongoing U.S. export restrictions targeting the technology sector.
For Nvidia, this development creates uncertainty regarding its future business in one of the world’s largest markets for AI hardware. Meanwhile, China is doubling down on domestic innovation, with major tech firms like Huawei and Baidu ramping up AI chip production to triple national output in the coming year. This shift highlights the intensifying technological competition between the U.S. and China, as both nations vie for leadership in critical advanced technologies like artificial intelligence and semiconductors.
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Jensen Huang, chief executive of Nvidia, told reporters in London on Wednesday
that he expected to discuss the chipmaker’s ability to do business in China with President Donald Trump that evening during the president’s state visit to the UK.
“We can only be in service of a market if the country wants us to be,” he said. “I’m
disappointed with what I see. But they have larger agendas to work out, between China and the U.S., and I’m understanding of that. We are patient about it.”
According to three people with knowledge of the matter, after receiving the Cyberspace Administration of China (CAC) order, the companies told their suppliers to stop the work.
“The top-level consensus now is there’s going to be enough domestic supply to meet demand without having to buy Nvidia chips,” said an industry insider.
“The message is now loud and clear,” said an executive at one of the tech companies. “Earlier, people had hopes of renewed Nvidia supply if the geopolitical situation improves. Now it’s all hands on deck to build the domestic system.”
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The ban on Nvidia’s AI chips by Chinese authorities marks a major turning point in the company’s global business strategy. As one of Nvidia’s largest markets, China has historically played a key role in the demand for its advanced GPUs, particularly in AI and data center applications. Losing access to this market not only impacts immediate revenue but also challenges Nvidia’s long-term growth in Asia. This move signals that China is accelerating its drive toward semiconductor self-sufficiency, reducing future reliance on U.S. tech giants.
For Nvidia, it means navigating a more fragmented and politically charged global landscape, where access to key markets may be dictated by government policy rather than product performance.
While CEO Jensen Huang has expressed patience and understanding, the company must now double down on innovation, diversify market exposure, and potentially seek deeper engagement in regions less affected by geopolitical conflict. The ban could also pressure U.S. policy on tech exports.