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Nvidia Faces Ban in China Amid AI Chip Woes, Chinese Tech Stocks Rise Amid US Sanctions
ByAinvest
Wednesday, Sep 17, 2025 12:15 pm ET1min read
Nvidia's shares are falling due to continued trouble in China, where authorities are telling top tech companies not to use Nvidia's AI chips. Chinese tech stocks are rising on AI optimism as the country aims to reduce reliance on the US. Baidu is leading gains after an upgrade to a buy rating. Uber's shares are lower due to rival Lyft's partnership with Waymo for autonomous ride-hailing in Nashville.
Baidu's (BIDU) stock surged nearly 16% in Hong Kong and 8% in U.S. trading on Wednesday after Arete Research upgraded the stock from sell to buy, citing the company's AI chip business and cloud computing potential to offset advertising revenue declines [1]. The upgrade came as Baidu secured a major partnership with China Merchants Group for AI applications and announced a 4.4 billion yuan bond offering to fund AI investments.Baidu's traditional search advertising business has faced challenges due to China's economic slowdown. However, the company is betting big on AI to offset this weakness. The company's Kunlun chip unit recently landed a big order from China Mobile for AI servers, positioning Baidu to compete with AMD and Nvidia in China's AI chip market [1]. The company's Apollo Go autonomous vehicle division also struck deals with Uber and Lyft to deploy robotaxi technology in international markets.
The stock surge comes as Chinese tech companies broadly rally. Tencent shares have climbed 82% from year-to-date lows while Alibaba has gained 106% from January’s bottom [1]. Baidu's stock has gained 59% year-to-date and jumped 80% from 2024 lows as investors bet on the company's AI transformation.
The upgrade and AI initiatives come amid continued trouble for Nvidia in China, where authorities have discouraged the use of Nvidia's AI chips [1]. Baidu's push into AI chip manufacturing aligns with China's efforts to reduce reliance on U.S. technology.
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