Chinese regulator tells local companies to stop buying Nvidia's AI chips - FT

Investing.com - China’s internet regulator has told large tech firms in the country to stop purchasing chips made by semiconductor giant and artificial intelligence-darling Nvidia (NASDAQ: NVDA), the Financial Times reported on Wednesday.

Citing people familiar with the matter, the FT reported that these companies -- including TikTok-owner ByteDance and e-commerce giant Alibaba -- have also been told by the Cyberspace Administration of China to terminate existing orders with Nvidia.

The report added that the businesses were also informed that they must end testing and orders of California-based Nvidia’s RTX Pro 6000D processors, which had been particularly designed for use in China.

Several companies had indicated they would order tens of thousands of the chips, but told Nvidia’s server suppliers to cease testing and verification work following the CAC’s demand, the FT said.

Nvidia CEO Jensen Huang unveiled the RTX Pro 6000D during a visit to Beijing in July, when U.S. officials were ratcheting down an earlier ban on Nvidia’s other China-tailored chip, the H20. Chinese regulators have reportedly also warned tech firms that they will need to justify using the H20 over domestic-manufactured options.

The reported ban comes as Beijing has been attempting to bolster domestic chipmakers to help them compete with U.S. rivals in an ongoing race to develop and harness AI models. Chinese regulators have called in local semiconductor players like Huawei and Cambricon to report on how their offerings match up to Nvidia’s, the FT said.

They now believe that Chinese chip names have products that equal or exceed Nvidia’s China-specific options, the paper noted.

Shares in Nvidia were slightly lower in premarket U.S. trading on Wednesday. In the previous session, the stock declined on a news report which suggested that demand for the RTX Pro 6000D in China has been weak.

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