Tech authorities in China mandate a ban on the purchase of Nvidia chips by technology firms within the nation.
The Cyberspace Administration of China (CAC) has issued an order to major tech companies in the country to halt purchases of Nvidia chips, marking a significant move in China's tech policy. Three people familiar with the matter have confirmed this development, which has been reported by the Financial Times.
The instruction from the CAC is clear and unequivocal, with Chinese technology companies being instructed to focus on building a domestic system instead of waiting for a resumption of Nvidia deliveries. This decision is part of China's efforts to boost its domestic semiconductor industry and compete with the US.
Insiders suspect that Nvidia has been shipping chips to China via hubs like Singapore and Malaysia. The order includes the cancellation of existing orders for Nvidia's RTX Pro 6000D, a customized product for China.
The move is expected to have a significant impact on Nvidia's business in China, with the company's stock down 1.3% in pre-market trading. Nvidia's sales in China account for 13% officially, but the actual percentage might be higher due to unofficial sales.
The Beijing embargo on Nvidia chip purchases is another significant dampener for the AI euphoria in the US. The AI euphoria in the US seems to have also infected Chinese stock markets, with Chinese AI stocks rising significantly in recent days and weeks likely due to the prioritization of China's own chip firms by Beijing.
The decision by the CAC could be a response to geopolitical tensions between China and the US. This development comes amidst growing concerns over the dependence of technology companies on foreign suppliers, particularly in the critical area of semiconductors.
This news follows the intensified efforts by the CAC to promote domestic chip production, indicating a significant shift in China's tech policy. The Financial Times reports that this development is likely to have far-reaching implications for the global tech industry.
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