2:43 PM · 12 August 2025

China's companies will stop buying Nvidia chips?

Nvidia
Stocks
NVDA.US, NVIDIA Corp
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A few hours after President Donald Trump approved a new solution for Nvidia that would allow the sale of the latest H20 model chips to China in exchange for an additional 15% tax, the Chinese government banned government companies from purchasing and using them, Bloomberg reports.


The ban applies to agencies and government companies involved in security and defense projects. Additionally, the Chinese Ministry of Industry and Information Technology has sent inquiries to technology companies, including Alibaba, ByteDance, and the Tencent group. The inquiry asks these companies to explain the necessity of ordering foreign components and mandates the use of local substitutes.


This is an indirect yet quite aggressive and assertive response from the Chinese government to attempts to de-escalate the trade war between the USA and China, in which Nvidia chips are one of the main weapons of the USA. USA negotiating position is further worsened by the fact that at the same time, President Donald Trump extended the suspension of some tariffs on China, which could be perceived by the Chinese side as a sign of weakness.


Nvidia's shares do not show a noticeable reaction to this news, possibly indicating that the markets are discounting an amicable resolution to the dispute. Nvidia's price is up 0.4% before the market opens.

 

Source: Xstation

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