China’s internet watchdog has banned large tech companies from testing and ordering Nvidia’s RTX Pro 6000D processors. Beijing is thus tightening the reins in its quest for technological independence from the United States.
The Financial Times understands that Alibaba and TikTok parent Bytedance, among others, were informed this week that they should no longer order the chips. Beijing is putting pressure on Chinese tech companies to stimulate the domestic semiconductor industry and break their dependence on Nvidia. This is part of a broader AI race against the United States. “The message is now loud and clear,” the FT quotes an unnamed executive from one of the tech companies as saying. “Earlier, people had hopes of renewed Nvidia supply if the geopolitical situation improves. Now it’s all hands on deck to build the domestic system.”
It was previously announced that Chinese chipmakers are aiming to triple the total output of AI processors next year. The new measure follows a conclusion by Chinese regulators that domestic chips deliver performance comparable to Nvidia’s China products. Beijing recently called on chipmakers such as Huawei and Cambricon, as well as Alibaba and search engine giant Baidu, to report how their products compare to Nvidia’s China chips.
They concluded that China’s AI processors have reached a level comparable to or exceeding Nvidia products under export controls. “The top-level consensus now is there’s going to be enough domestic supply to meet demand without having to buy Nvidia chips,” said an industry insider.
End of last Nvidia option
The Cyberspace Administration of China (CAC) instructed companies this week to stop testing the RTX Pro 6000D, Nvidia’s product developed specifically for China. Several companies had already indicated their intention to order tens of thousands of these chips and had begun verification work with Nvidia’s server suppliers.
The RTX Pro 6000D, introduced in July during Jensen Huang’s visit to Beijing, was the last product that Nvidia was allowed to sell in significant volumes in China. The ban goes beyond previous guidelines that focused on the H20, Nvidia’s other China-specific chip.
Nvidia shares plunged about 3 percent on Wednesday after the news. CEO Jensen Huang said in London that he found the loss disappointing but understood the bigger agendas between China and the US.
Nvidia began producing custom chips for the Chinese market after former President Biden banned the company from exporting its most powerful products to China. These sanctions were aimed at curbing Beijing’s progress in AI.
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