Nvidia (NVDA) Stock: China Bans Custom AI Chip Sales as Regulatory Pressure Mounts

TLDR

Table of Contents

China’s internet regulator banned major tech companies including Alibaba and ByteDance from buying Nvidia’s custom RTX Pro 6000D AI chips
Nvidia stock fell 1% in premarket trading following a 1.6% drop Tuesday, with shares struggling since latest earnings report
The RTX6000D chip has faced weak demand since launch due to being too slow for advanced AI work and costly at $7,000 per unit
Analysts had projected 1.5-2 million units for second half of 2024, but actual orders fell short of forecasts
China accused Nvidia of violating antimonopoly laws earlier this week, adding to regulatory pressure

Nvidia faces fresh challenges in China after the country’s internet regulator banned major tech companies from purchasing the chipmaker’s custom AI semiconductors designed for the Chinese market.

Seems like $NVDA China sales might be on their way to zero
"The Cyberspace Administration of China has banned the nation's largest technology companies from buying Nvidia’s AI chips, the Financial Times reported." pic.twitter.com/qmagLEclb0
— Wagie Capital (@WagieCapital) September 17, 2025

The Cyberspace Administration of China instructed companies including TikTok parent ByteDance, e-commerce giant Alibaba, and search engine Baidu to halt testing and cancel orders for Nvidia’s RTX Pro 6000D chips. The directive was reported by the Financial Times, citing sources familiar with the matter.

Nvidia stock dropped 1% to $173.12 in premarket trading Wednesday. The decline followed a 1.6% fall on Tuesday, continuing the stock’s struggles since the company’s latest earnings report.

The RTX Pro 6000D represents Nvidia’s attempt to navigate U.S. export restrictions while maintaining a presence in China. The chip was specifically designed as a lower-tier product that could comply with American trade rules while serving Chinese customers.

However, the product has faced lukewarm reception since its launch. Chinese buyers have criticized the RTX6000D for being too slow for advanced AI applications while carrying a hefty price tag of approximately $7,000 per unit.

Some purchasers noted that Nvidia’s RTX 5090, while banned from official sales, offers superior performance on the gray market at less than half the price.

Demand Falls Short of Projections

Wall Street analysts had high expectations for the RTX6000D when it began shipping. JPMorgan projected sales of about 1.5 million units for the second half of 2024, while Morgan Stanley forecast two million units.

Early market response revealed a gap between these optimistic projections and actual orders. The new Chinese ban will likely widen this gap further.

Chinese companies continue waiting for updates on Nvidia’s H20 chip, which received U.S. clearance in July but has yet to begin shipments. Local firms also hope authorities will approve the B30A chip, which would offer more processing power than the H20.

Regulatory Headwinds Intensify

The chip ban comes after China accused Nvidia of violating the country’s antimonopoly laws earlier this week. Nvidia stated it complies with regulations and will cooperate with government agencies.

IG analyst Chris Beauchamp noted that investors were already nervous ahead of Wednesday’s Federal Reserve meeting. The China news adds pressure on Nvidia, given that approximately 40% of its sales come from the Chinese market.

“There might be ways around a U.S. export ban for Chinese companies, but a domestically-imposed one is much harder to avoid,” Beauchamp said.

The directive reflects China’s push to accelerate adoption of domestic chip alternatives. Alibaba has promoted its T-Head processor line, while Baidu and Tencent are developing in-house models.

Other semiconductor stocks also declined in premarket trading. Advanced Micro Devices fell 1.1% and Broadcom dropped 0.2%.

Nvidia announced a partnership with British company Nscale to establish AI infrastructure in the U.K. during President Trump’s state visit to the country.

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