China’s internet regulator has instructed major domestic technology companies to stop buying chips from Nvidia (NASDAQ:NVDA), the semiconductor leader favored in artificial intelligence, according to the Financial Times.
Sources familiar with the matter told the FT that firms including ByteDance, owner of TikTok, and e-commerce giant Alibaba were directed by the Cyberspace Administration of China (CAC) to cancel existing orders with Nvidia.
The guidance also reportedly covers Nvidia’s RTX Pro 6000D processors, designed specifically for the Chinese market, with companies required to halt both testing and procurement of these chips. Several businesses had planned to purchase tens of thousands of units but have since paused server testing and validation work in compliance with the regulator’s instructions.
Nvidia CEO Jensen Huang first unveiled the RTX Pro 6000D during a July visit to Beijing, amid U.S. efforts to limit the company’s earlier China-focused chip, the H20. Chinese authorities are said to have told companies that they must justify using the H20 if domestic alternatives are available.
The move reflects Beijing’s push to strengthen local semiconductor makers in order to compete with U.S. firms in the fast-growing AI sector. Regulators have reportedly summoned domestic chip companies, including Huawei and Cambricon, to evaluate how their products compare with Nvidia’s China-tailored offerings. Officials now believe local solutions meet or exceed the performance of Nvidia’s China-specific chips, the FT added.
Nvidia’s shares were slightly down in U.S. premarket trading Wednesday, following a session where the stock fell on reports of weak Chinese demand for the RTX Pro 6000D.
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