Nvidia Shares Fall as China Reportedly Tells Tech Firms to Halt Its AI Chip Purchases

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Nvidia shares slipped after the Financial Times reported that China’s internet regulator has ordered the country’s largest technology firms to stop purchasing the U.S. chipmaker’s artificial intelligence products and cancel existing orders.

According to the report, the Cyberspace Administration of China (CAC) told companies including ByteDance and Alibaba this week to halt orders and testing of the RTX Pro 6000D, a chip Nvidia designed specifically for the Chinese market just two months ago. Several firms had been preparing to buy tens of thousands of units and had already started verification work with server suppliers before regulators instructed them to stop.

The ban marks a sharp escalation from earlier guidance, which focused on Nvidia’s China-only H20 chip. Beijing is pressuring domestic tech giants to reduce their reliance on U.S. hardware and instead accelerate adoption of homegrown semiconductors to compete in the global AI race.

“The message is now loud and clear,” an executive at one of the affected companies told the FT. “Earlier, people had hopes of renewed Nvidia supply if the geopolitical situation improves. Now it’s all hands on deck to build the domestic system.”

Nvidia created chips like the H20 and RTX Pro 6000D after the Biden administration barred exports of its most powerful AI products to China. The RTX Pro 6000D, unveiled during CEO Jensen Huang’s visit to Beijing in July, was the last Nvidia product allowed for broad sale in China.

Regulators have recently summoned Chinese chipmakers such as Huawei and Cambricon, alongside tech giants including Alibaba and Baidu, to assess how their processors compare to Nvidia’s China-specific products. Officials concluded that domestic AI chips are now at a level comparable to, or in some cases better than, the Nvidia models permitted under U.S. export restrictions.

China’s chipmakers are also aiming to triple the country’s AI processor output next year, signaling confidence in local supply. “The top-level consensus now is there’s going to be enough domestic supply to meet demand without having to buy Nvidia chips,” one industry insider said.