FT: China tells tech companies to stop buying Nvidia AI chips

The Financial Times (FT) reported on September 17 that the Cyberspace Administration of China (CAC) has asked the country's leading technology companies to stop buying Nvidia's artificial intelligence (AI) chips and cancel existing orders.

This is part of a larger effort to reduce dependence on US technology.

The Cyberspace Administration of China this week directed companies including ByteDance and Alibaba to end testing and orders for the RTX Pro 6000D chip, three sources familiar with the matter said, according to the FT.

The FT also said the new ban is stricter than previous guidance from Chinese regulators, which focused on the H20 chip – an older version of Nvidia's AI chip specifically for the Chinese market.

Nvidia, Alibaba and Bytedance have not commented yet.

Nvidia shares fell 1% in pre-market trading in response to the news.

Earlier this week, Reuters reported that Nvidia's latest AI chip, the RTX6000D, specifically for the Chinese market, had received lukewarm interest as several major tech companies had not placed orders.

Before the directive, some companies said they would order tens of thousands of RTX Pro 6000D chips and had begun testing and verification work with Nvidia server vendors, but later asked these partners to stop after receiving the directive from CAC, the FT reported.

Nvidia has been at the center of sensitive negotiations between China and the United States this year, due to the company's pivotal role in advancing future technologies, including AI.

Nvidia dominates the market for chips, which are essential for building and running AI services for companies ranging from Meta Platforms Inc. to DeepSeek.

This week, China ruled that Nvidia violated antitrust laws with its $7 billion acquisition of Mellanox Technologies Ltd. in 2020, marking the latest flare-up in tensions in the trade war with the United States.

Days earlier, the Chinese government also announced an anti-dumping investigation targeting a type of semiconductor produced by US companies such as Texas Instruments Inc.

Mr. Vey-Sern Ling, CEO of Union Bancaire Privee, commented that China clearly wants to develop AI on its own roadmap based on domestic technology platforms.

According to Mr. Ling, the country would rather accept the current difficulties than depend on American technology that could be arbitrarily restricted.

He also said that if the ban is indeed true, it would partly show China's confidence in its domestic supply chain, but he still believes it is likely to be a bargaining chip in trade negotiations with the US.

This information was given in the context that US President Donald Trump is expected to hold talks with Chinese President Xi Jinping on September 19, after the two sides held trade negotiations in Madrid (Spain).

The RTX6000 series is not considered Nvidia's flagship product, but rather a high-end chip designed specifically for the restricted Chinese market.

Chinese companies have long coveted Nvidia's most powerful accelerators, but the US has banned exports of these products to China over concerns they could advance China's geopolitical and military ambitions.

Also according to the FT, a source familiar with the matter said that Chinese regulators made this latest decision due to growing confidence that domestic chips have achieved a higher level of development.

In an effort to reduce dependence on foreign chips, companies like Alibaba and Baidu Inc. are developing their own alternatives.

Alibaba has secured a major customer in China’s second-largest wireless carrier for its “T-Head” AI chips, signaling that the Chinese tech giant’s fledgling semiconductor efforts are gaining ground in its home market./.

(Vietnam+)

Source: https://www.vietnamplus.vn/ft-trung-quoc-yeu-cau-cac-cong-ty-cong-nghe-ngung-mua-chip-ai-cua-nvidia-post1062438.vnp