China is banning its tech firms from buying Nvidia’s chips

Nvidia stock slipped in pre-market trading Wednesday amid reports that China has told its biggest tech firms not to buy the U.S. company’s chips, in a further escalation of the AI race between the two countries.

China’s internet regulator ordered companies to halt purchases and cancel existing orders of Nvidia’s RTX Pro 6000D product, the Financial Times reported , citing three people with knowledge of the matter.

The RTX Pro 600D is one of two Nvidia chips made solely for the Chinese market, along with the H20 chip. Nvidia’s stock price was down 1.6% in premarket trading on Wednesday.

Successive American administrations have moved to restrict China’s access to the most advanced American-made chips. Still, Nvidia booked roughly $17 billion from the country — about 13% of its total revenue — last year.

Last month, the company was reported to be working on a new AI chip for China that is more powerful than the H20 chip it currently sells to the nation, thought to be based on Nvidia’s Blackwell chip architecture.

When asked about the new chip in an August interview, Commerce Secretary Howard Lutnick did not rule out allowing Nvidia’s chief executive Jensen Huang to sell the more powerful product to China. “I’ve listened to him pitch the president, and the president listens to our great technology companies, and he’ll decide how he wants to play,” he said.

In April, the U.S. Commerce Department stopped Nvidia from selling its H20 chips to China, but it reversed the ban in July. Lutnick said the administration changed course so that China would still be “addicted” to using U.S. technology.

However, the reported move by the Cyberspace Administration of China (CAC) to direct companies including ByteDance and Alibaba to stop buying the chips would undermine that. It comes as the world’s second-largest economy looks to cut reliance on U.S. technology.

Earlier this week, Beijing said Nvidia had broken competition laws with a deal it completed five years ago. China also opened cases against U.S. suppliers over the weekend, including a pricing investigation into some products from chip company Texas Instruments.

Separately, President Donald Trump and Chinese leader Xi Jinping are scheduled to talk on Friday after the U.S. and China agreed on the outline of a deal that would resolve the dispute over who owns TikTok.

Nvidia, ByteDance and Alibaba did not immediately respond to Quartz’s requests for comment.