Jakarta, shesocial Indonesia
–
Government
China
prohibit technology companies in his country to buy chips from
Nvidia
, semiconductor giant from the United States.Actually, what is the reason China forbids technological companies such as Bytedance and Alibaba to buy chips from Nvidia?
This step is called in response to the increase in trade tension with Washington, as well as a strong signal that Beijing will not just submit to the export scheme offered by US President Donald Trump.
Launch
shesocial
On Monday (9/15), the announcement of this ban was delivered after the Chinese market regulator found alleged violations of anti-monopoly law committed by Nvidia.The company is considered to have violated the requirements for the acquisition approval of Melanox Technologies, the Israeli chip design company purchased by Nvidia in 2020.
The investigation which was originally launched last December is now continued, with the Chinese government said it will further investigate the Nvidia business practice in its area.
This step was carried out in the middle of the fourth round trading talks between US and Chinese diplomats that took place in Madrid, Spain.Although both parties said the meeting went well, the acts of mutual trade continued.
On Friday, the US Department of Trade included two China Chip companies into the trade list, forbid them to access American semiconductor technology.
In return, Beijing moved more aggressively by targeting Nvidia, the most valuable company on the US stock exchange and the main supplier of Global Artificial Intelligence Chips (AI).
Security issue
Ai Nvidia chip, specifically designed for the Chinese market, H20, is one of the main triggers for this prohibition.Although Trump’s recent government has allowed the chip exports to return to China through a special license agreement, Chinese authorities expressed concern about the security aspects of the chip.
The H20 chip is believed to have been used to develop Deepseek, one of the sophisticated AI models made by China that attracted the attention of Silicon Valley earlier this year.
The success of the model triggers concerns among Western analysts that the progress of AI China may be further than what has been estimated.
The Chinese government media also suggests that the H20 can pose a risk for national security, although there is no official statement that calls the chip directly.
For Beijing, the prohibition on the purchase of Nvidia chips is not only a matter of anti-monopoly law, but also part of a big strategy to build technological independence.With an increasingly strategic Chip AI market, both China and the United States realize that dominance in this field is directly related to future economic and military power.
Although Chinese semiconductor technology is still lagging behind the US, Beijing continues to pour funds and policies to catch up.
Prohibiting the purchase of chips from Nvidia can be a way to force domestic companies to accelerate the development of technology itself, as well as reject dependence on American products, no matter how attractive the offer comes from the White House.
Moreover, AI chip sales accounted for about 13 percent of Nvidia’s total revenue in 2024, and China is one of its biggest markets.That is, this prohibition not only has a strategic impact, but also shakes financially.
Nvidia shares reportedly fell 1.4 percent in pre-market trade after the announcement of this ban.
It is not yet clear whether China will impose further sanctions on NVIDIA or even limit the distribution of chips more broadly.But the direction of the policy is clear, China wants to send a firm message that they will not just accept every US attempt to continue to dominate the global technology market, especially in very sensitive fields such as AI and Semiconductor.
Jensen Huang’s disappointment
Nvidia CEO Jensen Huang expressed his disappointment over China’s policy which prohibits technology companies from buying Nvidia chips.
“We will continue to support the government and Chinese companies according to their wishes,” Huang said, launching
CNBC
, Thursday (9/18).
Huang, who has assets of up to US $ 154.3 billion or equivalent to more than Rp2,546 trillion, said that Nvidia contributed greater to the Chinese market than most other countries.
“And I am disappointed with what I see. But they have a bigger agenda to be resolved between China and the United States, and I understand that,” he continued.
(DMI/DMI)
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