Beijing orders ByteDance, Alibaba to cancel Nvidia chip tests and purchases
Nvidia chief executive officer Jensen Huang has said that he is “disappointed” following reports that China has banned the use of its semiconductors as tensions between Washington and Beijing over AI dominance escalate.
The Financial Times reported on Wednesday that the Cyberspace Administration of China (CAC) had ordered China’s leading tech firms, including ByteDance and Alibaba, to terminate testing and cancel orders for Nvidia’s AI chip, the RTX Pro 6000D.
Nvidia caught in the rising tech rivalry
Speaking to reporters in London, Huang sought to strike a conciliatory tone. “There are a lot of places we can’t go to, and that’s fine,” he remarked, adding that he would remain “patient” as governments on both sides wrestle with geopolitical frictions.
The order from Beijing underscores the increasingly bitter competition between the US and China over advanced semiconductors, technology widely seen as central to future economic strength and military capability.
Washington has already imposed successive restrictions on exports of high-end chips to China, citing security concerns. In July, President Donald Trump reversed an earlier decision that had banned Nvidia from supplying its most sophisticated products to Chinese customers. That reprieve was short-lived.
China has now responded with its own restrictions, and officials are said to have raised concerns that Nvidia’s products might have backdoor capabilities. The fear is that they will enable foreign monitoring. The CAC has also opened an investigation into whether Nvidia engaged in unfair market practices.
Jensen Huang refuted the claims, saying:
“We will continue to be supportive of the Chinese government and Chinese companies as they wish, and we’re of course going to continue to support the US government as they sort through these geopolitical policies,” Huang told journalists.
Losing the Chinese market will be a huge blow for Nvidia. China accounted for about 13% of Nvidia’s global sales in 2024, making it one of the group’s most lucrative overseas territories. Its shares dropped more than 1% in pre-market trading after the news of the chip ban broke.
The RTX Pro 6000D was specifically designed for the Chinese market after earlier restrictions prevented the company from selling its powerful processors in the country. While its adoption was slower, a total ban from the regulator shuts off a key avenue for growth.
Nvidia has already been paying 15% of its Chinese revenues to the US government under an unprecedented deal agreed earlier this summer. That arrangement further underlines how the company has been caught in the cross-currents of international politics.
Beijing is pushing for domestic alternatives
While the CAC’s order is a blow to Nvidia, it also presents opportunities for Chinese tech groups. Firms like Alibaba and ByteDance, that have been heavily invested in Nvidia’s products, now need to turn to home-grown suppliers.
China has made known its ambitions to build a self-sufficient semiconductor ecosystem and invested billions of dollars in local firms to reduce reliance on foreign technology, especially from the US.
Analysts suggest the clampdown could accelerate those plans. “China’s leadership clearly wants to limit dependency on American chips, even if local substitutes aren’t yet as powerful,” one industry observer said.
The broader effect may be a fragmentation of the global technology landscape. Rather than an integrated market, analysts warn the world could split into rival blocs, with separate supply chains dictated by political rather than commercial logic.
Nvidia’s global influence has not been shaken despite the recent developments in China, and earlier this year, it became the first company to cross the $4 trillion valuation. The valuation broke both Silicon Valley and Wall Street benchmarks. Nvidia’s chips are the base of most of the world’s data centres and are crucial to the drive being witnessed in AI applications.
Huang is among several US technology leaders, including Microsoft’s Satya Nadella, who are in Britain this week as part of President Trump’s state visit. They are expected to attend a state banquet in London, where technology partnerships between the UK and the US will be on the agenda.
Nvidia itself has pledged new investments in Britain, including chip supply for Stargate UK, a data centre in north-east England being developed in collaboration with OpenAI, Arm, and NScale.
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