China Halts Nvidia Chip Purchases, Escalating Tech Trade War

China's internet regulator has directed major tech firms to stop buying Nvidia's AI chips and cancel current orders. This move intensifies the ongoing trade conflict with the U.S. by reducing reliance on American technology, significantly impacting Nvidia's market presence in China.

China's internet watchdog has instructed leading technology companies to suspend purchases of Nvidia's artificial intelligence chips and rescind existing orders. This directive is part of a larger strategy to diminish China's dependency on U.S. technology, as reported by the Financial Times on Wednesday.

Nvidia's stock experienced a 1% decline in premarket trading following the news. This development is the latest episode in ongoing trade tensions, with successive U.S. administrations limiting China's access to advanced chips. Beijing is responding by encouraging domestic firms to move away from American suppliers, impacting industry giants like Nvidia.

The crackdown follows accusations against Nvidia for breaching China's anti-monopoly regulations, further stoking the tech trade conflict with the United States. The Cyberspace Administration of China (CAC) this week ordered companies such as ByteDance and Alibaba to cease their testing and orders of the RTX Pro 6000D chip. Meanwhile, Nvidia, along with Alibaba and ByteDance, has not yet responded to requests for comment.