Nvidia shares fall on report of growing pushback from China
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Nvidia CEO Jensen Huang at the China International Supply Chain Expo in Beijing in July. Photo: Wan Quan/VCG via Getty Images
Nvidia shares were trading down 3% Wednesday afternoon as the chip maker's China problem continues to escalate.
Why it matters: The world's most valuable company is being shut out of the second-biggest market in AI computing, a result of U.S. export restrictions and a deepening AI race between Beijing and Washington.
Driving the news: China regulators have banned the country's biggest technology companies from buying Nvidia's AI chips, including a newer product — the RTX Pro 6000D — specifically designed to comply with the U.S.'s latest export controls, the FT reported.
Between the lines: Previous pushback from China against Nvidia's other specially designed product for China, the H20, had already prompted the Santa Clara, California-based chip giant to remove any China sales from its third-quarter outlook.
- But several companies in China had signaled interest in the RTX Pro 6000D, and had started work around testing and verification, per the FT. That work has now been stopped, people with knowledge of the matter told the publication.
Nvidia CEO Jensen Huang, asked about the report during a media briefing in London, said that he was "disappointed" with the situation, but that the company was being patient amid the larger geopolitical standoff.
- "They have larger agendas to work out, you know, between China and the United States," he said, per the AP.
- Huang said he would likely speak with President Trump Wednesday night at a state banquet in the U.K., which they're both scheduled to attend.
The impact: Huang told investors in August that China could be a $50 billion market for Nvidia this year alone if the company could address it with competitive products. And that figure could grow 50% a year.
- "It's fairly important, I think, for the American technology companies to be able to address that market," he said on the earnings call.
Zoom out: Beijing's increasing pushback against Nvidia's chips is coinciding with its belief that China's domestic AI processors are now at least on par with the downgraded GPUs Nvidia is allowed to sell in the country, the FT reported.
- Separately Wednesday, Chinese state media reported that Alibaba had secured a major deal to provide AI computing power to China Unicom through its cloud services unit.
- It will reportedly help support a significant new data center project for the telecom in China, which will include other domestically produced chips.
