Geopolitics hit hard—CEO urges patience
Nvidia CEO Jensen Huang has responded to reports that China has banned the use of the company’s artificial intelligence (AI) chips, calling the move “disappointing” but urging patience as global trade tensions escalate.
The Financial Times reported that Beijing’s Cyberspace Administration directed major Chinese technology firms, including ByteDance and Alibaba, to halt purchases and testing of Nvidia’s processors. The order specifically targeted the RTX Pro 6000D, a chip designed for mainland buyers.
Speaking in London on Wednesday, Huang acknowledged the challenges. “I’m disappointed,” he said, but added that Nvidia would remain “patient” while regulatory issues are addressed.
Shifting forecasts
“There are a lot of places we can’t go to, and that’s fine,” Huang told reporters. He also told analysts and investors that Nvidia had adjusted its financial outlook to account for the uncertainty. “We’ve guided all financial analysts not to include China” in their projections, he explained.
The comments followed a more than 1% drop in Nvidia’s stock during early Wednesday trading, extending a 5% decline from its mid-August highs.
Trade war backdrop
The ban comes just weeks after the Trump administration reached a deal allowing Nvidia to export its H20 AI chips to China in exchange for 15% of its sales in the country, CNBC reported. Beijing’s decision is seen by analysts as a countermeasure in the deepening technology standoff between the world’s two largest economies.
According to Barchart senior market strategist John Rowland, the situation goes beyond trade tensions, representing a genuine arms race to determine who will lead in AI technology.
Domestic alternatives in China
Industry experts say the ban could accelerate China’s pivot to homegrown processors from companies, such as Huawei and Cambricon. According to a report from Decrypt, Chinese regulators now believe local chips are sufficiently advanced to sustain the country’s AI ambitions.
The Financial Times noted that abandoning Nvidia hardware would require a “fundamental rewiring” of AI infrastructure at leading Chinese firms.
Broader implications
Huang, while cautious, placed the dispute in context. “[The US and China] have larger agendas to work out,” he said.
Analysts warn that the ban could reshape the competitive landscape. China published more than 23,000 AI-related research papers in 2024, surpassing the combined output of the United States and the United Kingdom.
For Nvidia, the restrictions underscore the risks of geopolitical friction. For China, they signal a determination to stake its claim in the global AI race without American hardware.
