Tech companies in China warned to halt acquisitions of Nvidia's artificial intelligence chips
In a recent development, Nvidia's RTX Pro 6000D, the latest AI chip tailored for the Chinese market, has seen lukewarm demand from major tech firms. Reuters reported earlier this week that several companies had indicated they would order tens of thousands of the RTX Pro 6000D. However, these plans have been put on hold following a directive from the Cyberspace Administration of China (CAC).
The CAC's directive is a response to the US restrictions on China's access to advanced chips. Beijing has been pressuring domestic firms to turn away from American suppliers, affecting industry leaders like Nvidia. The fresh ban from regulators is stronger than the earlier guidance, focusing on H20, Nvidia's previous China-tailored AI chip.
Several companies had started testing and verification work with Nvidia's server suppliers before receiving the CAC order. Notably, Foxconn, Quanta Computer, and Compal Electronics halted the delivery of Nvidia's RTX Pro 6000D in November 2022 following the CAC order. The Financial Times reported that several companies had started testing and verification work with Nvidia's server suppliers.
The directive from the CAC was reported by three people with knowledge of the matter. Nvidia, Alibaba, and Bytedance did not immediately respond to Reuters' requests for comment. This is the latest flare-up in the trade war between China and Washington.
China recently accused an unspecified US company of violating its anti-monopoly law. The RTX Pro 6000D is a product from this unspecified US company. The trade war between China and the US has resulted in further restrictions and retaliations from both sides.
Shares of the US company were down 1% in premarket trading. The CAC order caused these companies to stop their work with Nvidia's server suppliers, leading to uncertainty in the tech industry. The RTX Pro 6000D's lukewarm demand is a reflection of the ongoing tensions between the two global superpowers.
This news comes as a blow to Nvidia, which has been making significant strides in the AI chip market. The company will need to navigate these challenges carefully to maintain its position in the competitive tech landscape. The trade war between China and the US continues to impact businesses across various sectors, with no signs of abating soon.
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