"China's top internet regulator, the Cyberspace Administration of China, has asked the country's leading tech firms, like Bytedance and Baidu, to stop testing Nvidia's RTX Pro 6000D, reports the Financial Timesciting unnamed sources with knowledge of the matter. The chipmaker's shares dropped 2.5% in early trading on Wednesday. But as Nvidia's stock dipped, Chinese tech stocks surged, as investors grew more bullish on the country's ability to push the envelope on both AI software and semiconductor manufacturing."
"The RTX Pro 6000D, launched in July, was Nvidia's latest effort to design a chip for the Chinese market that complies with U.S. export controls. Since 2022, Nvidia has been barred from selling its most advanced products to Chinese companies, forcing the chipmaker to design new chips that can legally be sold in the world's second-largest economy. Washington has routinely tightened its controls, forcing Nvidia to design new export control-compliant products."
"In the meantime, Chinese chip designers like Huawei and Cambricon have started to catch up. Domestic processors, even if they lag behind Nvidia's top-of-the-line products, may now compare favorably to what the U.S.-based chipmaker is allowed to sell in China. Nvidia is aware of the risk. In its recent earnings filing, the company warned that it "may be unable to create a competitive product for China's data center market that receives approval from the [U.S.] government," which would mean getting shut out of China's data center market."
China's Cyberspace Administration instructed leading tech firms such as Bytedance and Baidu to stop testing Nvidia's RTX Pro 6000D, prompting a 2.5% drop in Nvidia shares. Chinese technology stocks rallied, lifting the Hang Seng Tech Index 4.2% to a four-year high and a 45% year-to-date gain, as investors bet on domestic advances in AI software and semiconductor manufacturing. The RTX Pro 6000D was created to comply with U.S. export controls after a 2022 ban on Nvidia's most advanced products in China. Chinese chipmakers like Huawei and Cambricon have narrowed performance gaps, and Nvidia warned it may be unable to secure a U.S.-approved competitive data center product for China, risking exclusion from that market.
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