Nvidia Shares Drop Amid Chinese Push for Local AI Chips

Investing.com — Nvidia fell Friday as Beijing is pressuring Chinese companies to buy artificial intelligence chips produced in China instead of Nvidia’s, as part of a strategy to strengthen its domestic semiconductor industry and mitigate U.S. restrictions, according to a Bloomberg report citing unnamed sources.

NVIDIA Corporation (NASDAQ: NVDA) experienced a 3% drop in recent trading.

Chinese regulators have been discouraging companies from purchasing Nvidia’s H20 chips, which are critical for developing and deploying AI models, the sources reported.

The new policy, however, does not constitute a complete ban on purchasing Nvidia chips but serves as guidance for companies as regulators seek to support the country’s AI startups while avoiding escalating tensions with the U.S.

Nvidia declined to comment on the Bloomberg request. Similarly, China’s Ministry of Commerce, Ministry of Information and Technology, and Cyberspace Administration did not respond to Bloomberg’s faxed requests for comments.