NVIDIA CEO Expresses Disappointment Over Chinese AI Market as Beijing Embraces Domestic Alternatives

The CEO of NVIDIA has addressed the unfolding challenges in the Chinese AI market, expressing dismay at China’s pivot away from utilizing the company’s AI chips, specifically the H20 series.

China’s Confidence in Domestic AI Solutions Grows

NVIDIA’s position in China continues to deteriorate, particularly in light of increasing geopolitical tensions. According to a Financial Times report, the Cyberspace Administration of China (CAC) has instructed domestic conglomerates, including Tencent and ByteDance, to cease testing NVIDIA’s RTX 6000D GPU. This effectively freezes existing orders and signals a potential full-scale ban on Team Green’s products. Analysts suggest this shift could prevent NVIDIA from selling millions of RTX 6000D units, as the demand for these products in various projects is significant.

This bold stance marks a notable escalation in China’s strategy compared to previous actions, which primarily involved limiting H20 AI chip exports over concerns regarding possible security vulnerabilities. In response to this significant development, NVIDIA’s CEO shared his thoughts during a UK visit amidst discussions with the Trump administration:

We can only be in service of a market if the country wants us to be. 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. We are patient about it.

The momentum toward domestic AI chip solutions is gaining strength in China, fueled by advancements from companies like Huawei and Cambricon. These firms are increasingly developing in-house AI products capable of rivaling NVIDIA’s offerings. Reports indicate that China has reached a conclusion: its native AI chips can now effectively compete against NVIDIA’s products, especially given current export controls. This context has spurred the country to halt NVIDIA’s AI chip orders, aligning with their goal to lessen dependency on Western technology.

NVIDIA's H20 AI Accelerators Might Face The Next — Image Credits: WCCFtech

Despite demonstrating adequate performance capabilities, China still grapples with significant production bottlenecks. These limitations extend beyond semiconductors to include essential components such as High Bandwidth Memory (HBM), indicating that simply achieving performance parity with the H20 AI chip will not suffice for a successful domestic transition. Observing how Team Green navigates these heightened challenges presented by China will be intriguing as the market landscape evolves.

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