China pushes local companies to not buy AI chips from NVIDIA

A new report has cited two anonymous sources familiar with the matter that Chinese authorities have told local companies to avoid purchasing NVIDIA AI chips.

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The report comes from the South China Morning Post and states that Chinese authorities have told local companies they should be choosing Chinese AI chip solutions over NVIDIA's products, which would include AI chips developed by Huawei Technologies. Notably, China hasn't officially banned NVIDIA-made GPUs, but as a result of the demand for GPU processing power fueled by the emergence of artificial intelligence, an export ban was placed on high-end chips, causing NVIDIA to create a China-specific H20 GPU in order to be able to sell its product across the region.

This isn't the first time we have heard of China asking local companies to opt for locally-made chip solutions, as it was back in May that The Information published a story that detailed Chinese regulators asking companies to reduce their purchasing number of NVIDIA GPUs. Additionally, it was only last week Bloomberg reported China asked local buyers to avoid NVIDIA. It's clear from this timeline that Chinese authorities want complete control over the AI chips within its country, seemingly meaning that NVIDIA, an American company, has a limited timeline of being able to trade in China.

However, that won't likely happen until Chinese chip developers such as Huawei catch up to the performance NVIDIA products can provide.