China Bans Foreign AI Chips as US Blocks Nvidia Blackwell

The Government of China has mandated that all state-funded data center projects use exclusively domestically produced AI chips. Regulatory authorities ordered projects less than 30% complete to remove foreign hardware or cancel purchase plans, specifically targeting chips from Nvidia, AMD, and Intel. This directive aims for technological self-sufficiency and is expected to benefit domestic firms like Huawei and Cambricon, though analysts warn it may widen the computing power gap between China and the U.S.

Simultaneously, the Trump administration has tightened export controls to maintain a national security advantage. President Donald Trump blocked the sale of Nvidia's most advanced Blackwell chips to China and later extended this ban to scaled-down models like the B30A. While the U.S. permits the sale of older, stripped-down GPUs, Nvidia and AMD must pay the U.S. government a 15% commission on those revenues. Senator Chris Coons and other lawmakers supported these measures, arguing they are essential to protect U.S. economic and national security.

Nvidia CEO Jensen Huang has cautioned that U.S. export bans and restrictive regulations are driving Chinese firms to accelerate homegrown alternatives. During a series of visits to Taiwan Semiconductor Manufacturing Co (TSMC), Huang clarified that there are no active discussions to sell Blackwell chips to China and noted that Nvidia's market share in the Chinese data-center compute market has plummeted from 95% in 2022 to zero. Consequently, Nvidia is pivoting toward new markets, including joining the India Deep Tech Alliance.