China's CAC Halts Nvidia AI Chip Orders to Boost Domestic Tech Industry

China's Cyberspace Administration (CAC) has instructed major technology companies, including ByteDance and Alibaba, to halt purchases and cancel existing orders of Nvidia's RTX Pro 6000D AI chips. This directive, issued on September 17, 2025, underscores Beijing's commitment to reducing reliance on U.S. technology and bolstering its domestic semiconductor industry.

The CAC's order affects Nvidia's RTX Pro 6000D, a chip specifically designed for the Chinese market. This move follows earlier restrictions on Nvidia's H20 chip and reflects China's growing confidence in the capabilities of homegrown AI processors.

Nvidia CEO Jensen Huang expressed disappointment over the decision, acknowledging the complex geopolitical landscape affecting the tech industry. He stated, "We can only be in service of a market if the country wants us to be." Huang also noted, "I'm disappointed with what I see. But they have larger agendas to work out, between China and the US, and I'm understanding of that."

The ban is part of China's broader strategy to achieve technological self-reliance and ensure data security. By restricting the use of foreign AI chips, Beijing aims to foster the growth of domestic semiconductor companies and reduce dependence on U.S. technology.

This development has significant implications for Nvidia, as China accounts for a substantial portion of its sales. Following the announcement, Nvidia's stock experienced a decline, reflecting investor concerns over the company's future revenue streams in the Chinese market.

The directive also highlights the ongoing technological and trade tensions between the U.S. and China. Both nations are striving for dominance in AI and semiconductor technologies, leading to a series of regulatory actions and countermeasures.

In response to the ban, Chinese tech companies are expected to accelerate their efforts in developing and adopting domestic AI chips. This shift could reshape the global semiconductor landscape, as China seeks to establish itself as a leader in AI technology.

China's recent directive to halt purchases of Nvidia's AI chips marks a significant step in its strategy to achieve technological self-reliance and ensure data security. This move has substantial implications for global tech companies, the semiconductor industry, and international relations, highlighting the intricate interplay between technology and geopolitics.