China is asking its tech giants to ditch Nvidia chips and buy local instead: report

Chinese officials are asking domestic tech giants to buy locally-made AI chips instead of Nvidia's, The Information reported on Monday. Major tech companies like Alibaba, Baidu, TikTok parent company ByteDance, and Tencent were told to pare back their spending on foreign-made chips like Nvidia's, the outlet reported, citing people familiar with the matter. Representatives for China's National Development and Reforms Commissions, its Ministry of Industry and Information Technology and the four tech giants didn't respond to The Information's requests for comments. Nvidia is developing three new GPUs for China - the H20, L20, and L2. All three chips are designed to meet the restrictions under prevailing US sanction rules, Reuters reported in January, citing two people familiar with the matter. China is a critical market and key revenue generator for Nvidia. "If China can't buy from the United States, they'll just build it themselves. So the US has to be careful. China is a very important market for the technology industry," Nvidia CEO Jensen Huang told the Financial Times in May 2023. "We are rapidly approaching what we call a 'two tech stack divide,' where in essence, each country, the US and China, are effectively walling off or ring-fencing their tech stacks from each other," TPW Advisory founder, Jay Pelosky told BI's Yuheng Zhan.