China orders tech giants to halt Nvidia chip use as drive for semiconductor independence accelerates

China has instructed its leading technology companies, including ByteDance and Alibaba, to cease use and testing of Nvidia’s artificial intelligence chips, according to new information reported this week. The directive comes from the Cyberspace Administration of China (CAC) and signals a sharp escalation in Beijing’s ambition to reduce reliance on American technology suppliers in the strategically vital semiconductor sector.

The affected product, Nvidia’s RTX Pro 6000—engineered specifically for the Chinese market—has seen existing orders cancelled and verification projects stopped at the behest of Chinese authorities. Firms had reportedly been considering orders for tens of thousands of these chips before abruptly halting procurement in response to the government edict.

Jensen Huang, Nvidia’s chief executive, expressed disappointment at the sudden turn of events but acknowledged broader geopolitical considerations underpinning the decision. Nvidia’s business in China has experienced considerable volatility over the past three years, a reflection of rising tensions between the United States and China over advanced technologies.

Nvidia had created the RTX Pro 6000 as a compromise after former US President Joe Biden banned export of the company’s most powerful AI chips to China on national security grounds. Not long after, the administration under Donald Trump moved to require licences for future Nvidia sales to China, further restricting the company’s operations in the region. As a result, Nvidia wrote off over 4 billion dollars in inventory tied to its H20 chip, also produced for the Chinese market, after the ban on sales was extended.

Beijing’s move to inhibit the use of American chips is part of a broader push to cultivate a self-sustaining domestic semiconductor industry and shield national security interests. The US government has likewise expanded its embargo on design software and other technology deemed critical to chip development, tightening the screws in a high-stakes battle for tech supremacy.

Nvidia, now the world’s most valuable company with a market capitalisation in excess of 4 trillion dollars, remains a focal point for investors and policymakers alike. Surging demand for AI infrastructure since the arrival of generative AI tools has turbocharged its growth, yet the company is having to navigate an increasingly complex international landscape.