Regulatory Ban on NVIDIA AI Chips

The Cyberspace Administration of China (CAC) has issued a directive that bars Chinese technology firms from buying NVIDIA's newest AI graphics processing unit, the RTX Pro 6000D. The regulator instructed companies such as ByteDance and Alibaba to cancel any pending orders and to stop all testing activities related to the chip.

Scope and Enforcement

Following the CAC's order, the affected companies reportedly informed their suppliers to cease all related operations. The ban is described as stronger than earlier "guidance" the regulator issued concerning NVIDIA's previous H20 AI chips, indicating a more firm enforcement approach.

Company Reactions

NVIDIA chief executive Jensen Huang responded with disappointment. He remarked, "There are a lot of places we can't go to, and that's fine," and added that he would "support the US" as it addresses geopolitical issues with China.

Background on Export Controls

Earlier U.S. export restrictions on NVIDIA's H20 AI chips were motivated by concerns that the technology could be used for military applications. After a temporary lift, the chips were again subject to scrutiny, leading to limited demand from Chinese firms.

Domestic Chip Development

Chinese regulators have recently concluded that locally produced AI chips are now comparable to, or possibly exceed, the performance of NVIDIA's offerings. The assessment involved domestic chipmakers such as Huawei and Baidu, which were asked to provide reports comparing their products against NVIDIA's models.

Implications for the Market

The ban adds to a series of regulatory challenges facing foreign semiconductor companies in China. It follows a separate antitrust investigation into NVIDIA's acquisition of Mellanox, where Chinese authorities alleged violations of national regulations and prior acquisition conditions.

Outlook

With the CAC's directive in place, Chinese tech firms are expected to focus on domestic chip solutions while navigating the broader geopolitical landscape that influences technology trade between the United States and China.

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