China forces tech companies to cease buying Nvidia AI chips
Chinese regulators have told the company’s tech giants to stop buying Nvidia AI chips
The Cyberspace Administration of China (CAC) has instructed companies to halt orders for Nvidia AI chips, including the Nvidia H20 RTX Pro 6000D. This change is part of China’s effort to boost its domestic semiconductor industry and compete with the US.
Companies that have been told to halt orders of Nvidia hardware include ByteDance and Alibaba. Nvidia currently makes several China-only products. These products have been created to fit within the performance limits set by the US government. In other words, Nvidia’s best AI hardware cannot be exported to China.
This ban could result in tens of thousands of RTX Pro 6000D orders being cancelled. China wants its companies to invest in locally produced hardware. Chinese regulators now believe that domestically made hardware can now compete with Nvidia’s chips. While Chinese companies cannot match Nvidia’s best AI hardware, their latest hardware is reportedly comparable to Nvidia’s China-only products.
Nvidia’s CEO, Jensen Huang, made the following statement about China’s ban on Nvidia AI chips.
We can only be in service of a market if the country wants us to be,
I’m disappointed with what I see. But they have larger agendas to work out, between China and the US, and I’m understanding of that. We are patient about it.
Chinese companies have been ramping up the production of their own AI chips. Chinese officials now believe that these companies can produce enough silicon to meet the needs of the Chinese market. This change will deny Nvidia revenue from the Chinese AI market. Furthermore, it will leave them with a large amount of China-oriented chips that it can no longer sell. If Chinese companies can already make H20 and RTX Pro 6000D competitors, how long will it be before Chinese chips can compete with Nvidia’s best products?
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