China has enforced a ban on Nvidia’s RTX 5090D V2 chip, coinciding with the company's CEO Jensen Huang visiting Beijing alongside former US President Donald Trump. The move underscores ongoing tensions between the global superpowers as China pushes to nurture its domestic semiconductor industry and reduce reliance on foreign AI hardware.
- China bans Nvidia RTX 5090D V2 amid US export control compliance.
- Nvidia CEO visited China during ban announcement.
- Domestic AI chip makers like Huawei gain market share.
What happened
China has formally prohibited the import and sale of Nvidia’s RTX 5090D V2 chip, a model introduced last August specifically modified to comply with US export controls. This ban was imposed while Nvidia’s CEO Jensen Huang was visiting Beijing with former US President Donald Trump, marking a significant development in the tech tensions between the US and China. The chip, targeted at Chinese gamers and 3D animation professionals, has also found a user base among AI developers who cannot access Nvidia’s most advanced products.
Why it matters
This ban is a clear indication of China’s strategic intention to support its domestic AI chip manufacturers such as Huawei and Cambricon, aiming to accelerate their catch-up with US technology leaders. Huawei, for instance, is expected to claim a dominant share of China’s AI chip market this year, benefiting from sharp sales growth driven by local demand for alternatives to Nvidia’s technology.
China’s AI chip market is projected by Morgan Stanley to grow substantially, reaching an estimated $67 billion by 2030, with domestic companies anticipated to supply the overwhelming majority of that market. The restriction also complicates Nvidia’s position in one of its key growth regions and highlights the broader geopolitical contest over who will lead the future of AI computing hardware.
What to watch next
Industry observers will be monitoring Nvidia’s upcoming earnings report, widely viewed as a barometer of the broader AI infrastructure boom and potentially influenced by the evolving landscape in China. Nvidia and Chinese customs authorities have not yet publicly commented on the ban, leaving questions about how long China’s restrictions will last and whether negotiations could open opportunities in the future.
Additionally, the trajectory of China’s domestic chipmakers will be critical. As Beijing prioritizes technological self-sufficiency, partnerships and investments into Chinese AI hardware firms are expected to increase, potentially reshaping global supply chains and market leadership in the high-performance computing arena.