According to a new report by the Financial Times, China’s Cyberspace Administration (CAC) has urged local companies, including ByteDance, the parent company of TikTok, and Alibaba, to halt purchases of Nvidia’s RTX Pro 6000D chips. These chips are specifically designed for the Chinese market to circumvent U.S. export restrictions.
As per CNBC, Nvidia CEO Jensen Huang has expressed disappointment over the chip ban, stating, “We probably contributed more to the China market than most countries have. And I’m disappointed with what I see.” Huang added that there are “larger agendas to work out between China and the United States,” and he is fully aware of this.
Jensen Huang also told reporters that the company has informed analysts not to include China in their financial forecasts. “The reason for that is because it will largely be determined by discussions between the U.S. and Chinese governments,” Huang added.
Huang described Nvidia’s experience in the Chinese market as “a bit of a rollercoaster,” while emphasizing that the company would continue supporting the Chinese government and local companies as they see fit.
After Nvidia was banned from selling its state-of-the-art AI chips to China, the company developed a scaled-down version, called the H20, to continue serving Chinese customers. While the chip offers lower computing power compared to Nvidia’s flagship product, it remains in high demand among Chinese companies and even the Chinese military.
However, following Trump’s entry into the White House, the U.S. government informed Nvidia that it would require export licenses to sell H20 chips to China. After several months of back-and-forth negotiations, Nvidia agreed to give 15 percent of its Chinese H20 sales to the U.S. government in order to lift the export ban.
While everything seemed favorable for Nvidia, reports emerged that the U.S. had apparenly requested Nvidia to embed a kill switch, tracker, or backdoor in the chips exported to China. The news prompted Chinese authorities to instruct local firms to halt purchases of Nvidia chips.