Economy

China Orders Tech Giants to Halt Nvidia Chip Purchases: What This Means for Your Business

China told firms to halt Nvidia AI chip purchases amid tech tensions; Nvidia shares fell.

September 17, 2025, 10:00 AM

Two microchips with the flags of the USA and China, representing a technological rivalry

Two microchips with the flags of the United States and China on them, symbolizing the global technological and economic competition over semiconductors. By MDL.

Executive Summary

China’s Cyberspace Administration (CAC) has instructed leading domestic tech firms like ByteDance and Alibaba to cease purchasing Nvidia’s AI chips, including the RTX Pro 6000D, and cancel existing orders.

This directive escalates Beijing’s efforts to reduce reliance on U.S. technology and follows recent accusations of Nvidia violating China’s anti-monopoly law.

The move highlights China’s strategic imperative to foster indigenous technological capabilities and minimize dependence on foreign suppliers, impacting Nvidia’s market access in China.

The Story So Far

China’s directive to its leading technology firms to cease purchasing Nvidia’s AI chips is a direct consequence of escalating U.S.-China trade and technology tensions, reflecting Beijing’s strategic imperative to cultivate indigenous technological capabilities and reduce its reliance on foreign, particularly American, suppliers. This action marks a more stringent measure in China’s ongoing efforts to assert technological independence, following previous guidance concerning earlier versions of Nvidia’s China-specific AI chips.

Why This Matters

This directive from China’s internet regulator marks a significant escalation in Beijing’s efforts to reduce reliance on U.S. technology, directly impacting Nvidia’s market access and sales in China, even for chips specifically designed for the region. The move underscores China’s strategic imperative to accelerate indigenous technological development and further complicates the global technology trade landscape amidst ongoing U.S.-China tensions.

Who Thinks What?

China’s Cyberspace Administration (CAC) and Beijing are directing domestic technology firms to cease purchasing Nvidia’s AI chips, viewing this as an escalation in efforts to reduce reliance on U.S. technology and foster indigenous capabilities.

Nvidia faces an impact on its market access and sales in China due to the directive, which has led to a decline in its share prices.

Leading Chinese technology firms like ByteDance and Alibaba are being instructed to cancel existing orders and cease purchasing Nvidia’s AI chips, despite some having recently planned to order tens of thousands of units.

China’s internet regulator, the Cyberspace Administration of China (CAC), has reportedly instructed leading domestic technology firms, including ByteDance and Alibaba, to cease purchasing Nvidia’s artificial intelligence chips and cancel existing orders. This directive, reported by The Financial Times on Wednesday, marks an escalation in Beijing’s efforts to reduce its reliance on U.S. technology amidst ongoing trade tensions. The news led to Nvidia’s shares declining by 1% in premarket trading.

Escalating Technology Tensions

The order specifically targets Nvidia’s RTX Pro 6000D, a newer AI chip tailored for the Chinese market. This move comes just days after China accused Nvidia of violating its anti-monopoly law, signaling another flare-up in the broader technology rivalry with Washington. The CAC’s directive is considered a more stringent measure compared to earlier guidance concerning previous versions of Nvidia’s China-specific AI chips.

Market Reception and Prior Orders

Despite being developed for the Chinese market, the RTX6000D had reportedly experienced lukewarm demand, with several major tech firms initially hesitant to place orders. However, some companies had started testing the RTX Pro 6000D and indicated plans to order tens of thousands of units before the CAC issued its definitive order to halt purchases.

Strategic Implications

This latest action by Chinese regulators underscores Beijing’s strategic imperative to foster indigenous technological capabilities and minimize dependence on foreign suppliers, particularly from the United States. The directive not only impacts Nvidia’s market access in China but also highlights the complex and evolving landscape of global technology trade and competition.