nvidia hit with china ban amid us trade war
beijing, Friday, 19 September 2025.
tensions between the us and china have ratcheted up. china’s cyberspace administration has reportedly banned domestic tech firms from purchasing nvidia chips. this action follows an anti-trust investigation into nvidia. it also arrives during an ongoing effort to ramp up domestic chip production. nvidia’s ceo, jensen huang, expressed his disappointment. nvidia may have to pay 15% of its chinese revenues to the us government due to prior agreements. the ban impacts nvidia’s revenue and highlights the importance of ai chips in sino-us relations.
impact on nvidia’s stock
The news of the ban did not trigger a strong negative reaction from investors [2]. Shortly after the announcement, nvidia’s stock experienced a slight dip. The share price decreased by 1.96% [2]. This suggests that the market had already factored in potential risks associated with us-china trade tensions [GPT]. CFRA analyst Sam Stovall believes china’s actions are a tactic to gain leverage in trade negotiations with the us [2]. He suggests the restrictions on nvidia could be lifted if both countries reach an agreement [2].
china’s ai ambitions and domestic alternatives
China’s move to ban nvidia chips underscores its ambition to become self-sufficient in ai technology [1][3]. The chinese government is actively supporting domestic chip manufacturing [1]. Semiconductor manufacturing international corporation (smic) plans to test domestically produced immersion duv lithography [1]. Chinese firms are also exploring open-source models to drive innovation [1]. This ban reflects china’s willingness to accept a potentially less advanced ai ecosystem [1]. The condition is that it remains entirely under chinese control [1].
nvidia’s market position and competitive advantage
Nvidia has become a central player in the ai boom. Its chips power data centers globally [3]. The company’s graphics processing units (gpus) are considered essential for developing generative ai [2]. Despite us export controls, nvidia has attempted to navigate restrictions by creating lower-capacity models for the chinese market [2]. Some of these models have also faced bans [2]. Currently, the rtx pro 6000d chip, based on nvidia’s blackwell technology, is still permitted for export [2]. However, large chinese tech companies like deepseek, tencent, and alibaba had previously ordered nvidia chips [3].
geopolitical implications and nvidia’s response
Jensen huang expressed his disappointment with the situation [3]. He emphasized the need for global access to technology, including china [3]. Huang stated that the advancement of human society is not a zero-sum game [3]. He affirmed nvidia’s commitment to supporting both the us and chinese governments [3]. Nvidia had previously been banned from selling its most advanced chips to china, but that ban was reversed [3]. Nvidia is also investing in the uk, supplying chips to the stargate uk data centre [3].