China Bars Tech Firms from Purchasing Nvidia AI Chips

For the second time, Nvidia faces exclusion from the Chinese market, but this time the restriction comes from Beijing rather than Washington.

China's internet regulatory body, the Cyberspace Administration of China, has prohibited domestic technology firms from purchasing Nvidia's AI chips, according to an initial report by the Financial Times.

The agency also instructed major tech companies, including ByteDance and Alibaba, to halt testing and orders for Nvidia's RTX Pro 6000D server, a product tailored specifically for the Chinese market.

Earlier, in late August, Chinese authorities had already discouraged companies from acquiring these chips, advocating instead for alternatives developed by domestic manufacturers.

This ban is expected to significantly impact China's tech landscape. Although local firms such as Huawei and Alibaba design their own AI chips, Nvidia remains the undisputed global leader, with its chips widely regarded as among the most advanced available.

When asked for comment, Nvidia shared a statement from CEO Jensen Huang, who expressed disappointment but acknowledged the geopolitical context. "We can only operate in a market if the country permits it," Huang stated. "While the situation is disappointing, there are broader agendas between China and the U.S. We remain patient and committed to supporting the Chinese government and businesses as they see fit."

In April, the Trump administration imposed licensing requirements on semiconductor companies, including Nvidia, restricting the sale of AI chips to China.

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During Nvidia's first-quarter earnings call, Huang estimated that the inability to sell H20 AI chips in China would lead to an $8 billion revenue loss in the second quarter alone.

By June, Nvidia had stopped including China in its financial projections, effectively considering the market closed to its business.

In July, the Trump administration reversed its position, allowing semiconductor companies to resume sales to China. In August, the White House announced it would grant the necessary licenses, but with a condition: the U.S. government would receive 15% of the revenue from chips sold. However, as of Nvidia's most recent earnings report, the company had not sold any units to Chinese customers under this arrangement, citing delays in implementing the Trump administration's proposal.