China orders tech giants to halt Nvidia AI chip purchases
China’s regulator has banned the country's largest technology companies from buying chips from U.S. giant Nvidia. This is another step in Beijing's strategy to support the national industry and compete with the U.S. in artificial intelligence.
According to informed sources, the Cyberspace Administration of China (CAC) last week ordered ByteDance and Alibaba to halt testing and purchases of the Nvidia RTX Pro 6000D, a chip designed specifically for the Chinese market.
Many Chinese firms had planned to order tens of thousands of these chips and had already begun testing them with server equipment suppliers based on Nvidia chips. However, after the CAC order, tech giants were forced to halt operations and notify partners of canceled contracts. Nvidia has since started offloading its remaining stock of these chips on the domestic market.
The ban also covers the earlier H20 chip, another Nvidia model designed specifically for China, extending beyond previous guidelines. Regulators argue that domestic technologies are now on par with Nvidia’s products, making further reliance on U.S. suppliers unnecessary.
Beijing is betting on the development of their own semiconductor technologies industry to reduce dependence of local players on Western manufacturers and strengthen the country's position in the global race for AI leadership.
Nvidia beganproducing special chip versions for China after the Biden administration restricted exports of its most powerful models to slow the growth of Chinese AI. More recently, Chinese regulators have increased support for domestic manufacturers such as Huawei, Cambricon, Alibaba and Baidu to help their solutions compete with Nvidia's products. Now, Chinese processors have come close in performance to their foreign counterparts, and in some cases, may even surpass them.
The Financial Times reports that Chinese manufacturers plan to triple their AI chip production next year. An industry insider, who requested anonymity, said there is now a broad government consensus that domestic capacity can meet demand without attracting American suppliers.
The RTX Pro 6000D was officially unveiled in July during Nvidia's CEO's visit to Beijing. At the same time, the company announced a partial easing of U.S. sanctions on H20 and RTX 4090D chips. Nevertheless, Chinese regulators continue to insist that local firms prioritize domestic developments and even demand explanations when imported components are purchased.
