Nvidia Stock Drops on Report China Has Banned Its Chips. What It Means for Investors.

Nvidia is banned from selling its most advanced AI products in China. (David Paul Morris/Bloomberg)

Key Points

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• China’s internet regulator reportedly banned major tech companies from purchasing Nvidia’s custom AI chips.
• Nvidia’s RTX Pro 6000D chip, introduced in July, faces a ban, impacting Nvidia’s aspirations in China.
• Nvidia stock fell 1.8%; CEO Jensen Huang expressed disappointment but remains patient and supportive of China.

Nvidia stock fell Wednesday after a report said China’s internet regulator has banned the country’s biggest tech companies from buying its custom-made artificial-intelligence chips for the Chinese market.

It’s another blow to Nvidia’s Chinese aspirations in the world’s second-largest economy after Beijing urged companies to avoid using its H20 semiconductors over the summer. However, Nvidia has already removed Chinese sales from its forecasts.

The Cyberspace Administration of China (CAC) told TikTok parent ByteDance, e-commerce giant Alibaba, and others to end testing and orders of RTX Pro 6000D—Nvidia’s tailor-made product for the country, the Financial Times reported Wednesday, citing people familiar with the matter.

The RTX Pro 6000D was introduced only in July, when Nvidia also said the U.S. would ease its previous ban on the H20 chip.

“We can only be in service of a market if a country wants us to be,” said CEO Jensen Huang at a Wednesday press conference in London in response to a question about the CAC.

“I’m disappointed with what I see but they have larger agendas to work out between China and the United States,” Huang added. “I’m patient about it. We’ll continue to be supportive of the Chinese government and Chinese companies as they wish.”

Nvidia declined to further comment on a potential China ban on its RTX Pro 6000D chip. Alibaba , and ByteDance didn’t immediately respond to a Barron’s request for comment.

Nvidia stock was down 1.8% to $171.61 Wednesday, following a 1.6% drop Tuesday. Meanwhile, the was rising 0.1% and the was trading down less than 0.3% ahead of the Federal Reserve’s next interest-rate decision scheduled for Wednesday afternoon.

“Investors were already on edge ahead of today’s Fed meeting, but jitters will heighten further on this news about China and Nvidia,” wrote IG analyst Chris Beauchamp.

A ban on RTX Pro 6000D would go beyond previous import restrictions on Nvidia’s H20 chip, the AI chip specifically designed for the Chinese market.

“[Nvidia] shares have struggled for direction since the latest earnings report, and today’s news puts further pressure on this market darling,” Beauchamp said. “There might be ways round a U.S. export ban for Chinese companies, but a domestically-imposed one is much harder to avoid.”

Beijing regulators have also told Chinese chip makers such as Huawei, Cambricon, Alibaba, and Baidu to report on how their products stack up against Nvidia’s chips, according to the FT report. Domestic AI chips have reached or exceeded the level of the products Nvidia sells in China, a person familiar with the matter said.

China earlier this week said Nvidia had violated the country’s antimonopoly laws. The chip maker said it complies with regulations and will cooperate with government agencies, Barron’s reported.

Republican House Speaker Mike Johnson said in an interview with CNBC Wednesday morning that the Trump administration and congress understand that China “has been working for a long time now to become a peer to peer adversary with the United States.”

“We’re in a race with them, frankly, in so many areas—in AI, in the advancement of new technology,” Johnson said. “And China is not a fair trading partner. They’re a communist regime. They steal our intellectual property. They have no regard whatsoever for U.S. trademark law or any of the other provisions that make for fair trade agreements.”

Huang expects to speak to President Donald Trump, who is on a state visit to the U.K., about his company’s ability to do business in China later on Wednesday.

It comes as the world’s two largest economies reached a framework deal on the social media app TikTok, owned by Chinese company ByteDance, earlier this week. TikTok is facing a potential ban in the U.S. unless it divests its operations in the country. Investors are still waiting for the countries to reach a broader trade deal on tariffs as the latest 90-day pause is set to expire in November.

Separately, Nvidia announced it is partnering with British company Nscale to set up AI infrastructure in the U.K., as President Donald Trump was on a state visit to the country.

Among other chip makers, Advanced Micro Devices was down 0.9% and Broadcom was dropping 1.5% on Wednesday.

Write to Elsa Ohlen at elsa.ohlen@barrons.com and Angela Palumbo at angela.palumbo@dowjones.com