Nvidia shut out of China as Beijing bans its AI chips, here's why

Nvidia

China has officially barred domestic tech companies from buying Nvidia’s artificial intelligence chips, marking a dramatic escalation in the ongoing tech rift between the world’s two largest economies.

The Cyberspace Administration of China has ordered firms such as ByteDance and Alibaba to halt testing and procurement of Nvidia’s RTX Pro 6000D server, a chip Nvidia had customised for the Chinese market. The Financial Times first reported the ban, which follows Beijing’s earlier efforts to push local players towards homegrown alternatives.

The decision is a heavy blow for China’s AI ecosystem. While companies like Huawei and Alibaba have been developing their own chips, Nvidia remains the global market leader, with its GPUs powering much of the current AI boom worldwide. Losing access to them could slow China’s progress in advanced AI research and deployment.

Nvidia CEO Jensen Huang, speaking at a press conference in London on Wednesday, expressed disappointment at the move but struck a diplomatic tone. “We can only be in service of a market if a 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 United States. And I’m patient about it.”

The US had already imposed restrictions earlier this year, requiring companies to obtain licences to sell AI chips to China. Now, with Beijing’s ban, Nvidia finds itself squeezed from both sides. Huang admitted Nvidia has guided analysts not to count China in financial forecasts, describing the company’s China business as “a bit of a roller coaster.”

Still, Huang underlined the importance of the Chinese market, which he called “large” and “vibrant,” noting Nvidia’s 30-year presence there. For now, however, China’s AI race looks increasingly like a homegrown contest.