China Turns Away From Nvidia as Homegrown AI Chips Gain Ground

China has instructed its biggest tech firms, including Alibaba and ByteDance, to stop purchasing Nvidia processors. The decision comes as a shock for the American chip giant, which only recently introduced the RTX Pro 6000D. This model was designed specifically for China in hopes of avoiding U.S. export sanctions and keeping Nvidia in the country’s AI race.

The sudden shift is tied to two strategic goals. First, Beijing wants to reduce its reliance on American technology and accelerate local semiconductor innovation. Second, cutting off Nvidia provides leverage in negotiations with Washington, which continues to tighten restrictions on advanced chip exports.

Impact on Tech Giants and Nvidia

Chinese corporations had already planned to buy tens of thousands of RTX Pro 6000D units for training generative AI models and powering cloud services. Those plans now face major revisions. The likely alternative is a faster adoption of domestic hardware, ranging from Huawei to emerging startups in Shanghai and Shenzhen.

For Nvidia, the consequences could be severe. China accounts for up to one fifth of its data center revenue. Losing that share would mean billions in missed contracts and a weaker global position. The company may find itself displaced as China backs local players with heavy state support.

A Growing Divide in AI Chips

The attempt to balance politics and business through the 6000D may have backfired. Instead of securing its role in China, Nvidia now faces exclusion from one of its most valuable markets. The global AI chip sector, already strained by competition, must now brace for deeper fragmentation as the U.S. and China pursue separate technological paths.