Nvidia Drops as Beijing Discourages Local Firms from Purchasing Nvidia Chips – BBG

Nvidia’s stock experienced a decline on Friday as Chinese authorities are urging local companies to purchase artificial intelligence chips manufactured domestically instead of relying on Nvidia’s products. This move is intended to strengthen China’s semiconductor industry in light of ongoing U.S. trade restrictions, according to reports from unnamed sources.

The company’s shares fell by 3% in recent trading sessions.

Chinese regulators have been advising companies against the purchase of Nvidia’s H20 chips, which are essential for the development and deployment of AI models. However, sources indicate that this new directive does not constitute a complete ban on acquiring Nvidia’s chips. Instead, it reflects a strategy to support China’s emerging AI startups while simultaneously managing tensions with the United States.

Nvidia declined to comment on the reports, and Chinese regulatory bodies have not responded to requests for statements.