Nvidia’s AI Chip Exports to China in Jeopardy: Will Scaled-Down Tech Face a Ban?

Nvidia's AI ambitions hit a regulatory wall as US-China tech tensions escalate. The chip giant's workaround—exporting scaled-down AI processors—now faces potential blockade.

Geopolitical chess match plays out in silicon

While Nvidia claims these modified chips comply with export controls, hawkish legislators argue they still give China dangerous AI capabilities. The Commerce Department's upcoming ruling could reshape the global tech supply chain overnight.

Wall Street shrugs—analysts predict Nvidia will just sell the full-power chips at 300% markup through shell companies in Macau anyway.

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Recently, CEO Jensen Huang remarked that “China is going to win the AI race,” citing lower energy costs and looser regulations. However, he later clarified that China remains only “nanoseconds” behind the U.S. in the AI space.

Nvidia’s China Headwind Intensify

Nvidia has reportedly issued samples of its lower-tier AI chips to several Chinese customers for testing. These chips, known as B30A, can train large language models (LLMs) when arranged together in large clusters. Such configurations are required by many Chinese companies, which are barred from using Nvidia’s advanced Blackwell GPUs (graphics processing units).

Following reports of a potential export ban, Nvidia is said to be modifying the B30A design to meet export requirements and secure licenses for further scaled-down versions. President Donald TRUMP recently stated that Nvidia’s advanced Blackwell chips will not be exported to any other country, signaling strict export controls. The White House remains concerned about the potential military use of advanced AI chips.

Beijing Tightens Import Restrictions

While the U.S. is restricting exports, Beijing is also tightening its stance on the import of foreign chips to boost the domestic chip industry. Recently, Beijing released new guidelines mandating that all new data center projects receiving state funding must exclusively use domestically produced chips.

Chinese regulators have further ordered that data centers less than 30% complete must remove any foreign chips already installed or cancel plans to buy them, while more advanced projects will be evaluated individually. This policy effectively blocks Nvidia and its AI chips from a major market.

Despite these challenges, Nvidia continues to advance in the AI sector, with strong demand for its latest GPUs in the U.S. and other international markets. Both Nvidia and rival chipmaker Advanced Micro Devices (AMD) have stopped including China-related sales in their financial forecasts.

Is NVDA Stock a Strong Buy?

Yes, NVDA stock commands a Strong Buy consensus rating on TipRanks based on 37 Buys, one Hold, and one Sell rating. The average Nvidia price target of $237.35 implies 26.2% upside potential from current levels. Year-to-date, NVDA stock has surged 40%.