China has directed its top tech companies, including ByteDance and Alibaba, to stop purchasing NVIDIA's AI chips and cancel existing deals, marking a significant escalation in the U.S.-China tech trade war. The ban specifically targets NVIDIA's RTX Pro 6000D, a server-level GPU critical for training AI models and powering data centers, which had been selling in China for approximately 50,000 yuan per unit.
NVIDIA's stock fell over 4% following the announcement, with pre-market trading dipping to around $174. Analysts estimate the company could lose $8–16 billion annually from these restrictions, as China previously accounted for up to 17% of NVIDIA's revenue. NVIDIA CEO Jensen Huang expressed disappointment but acknowledged the larger geopolitical agendas at play.
The ban has already impacted AI-linked cryptocurrencies. Fetch.AI (FET) dropped 2.5% in a day, Internet Computer (ICP) fell over 4% in a week, Akash Network (AKT) declined more than 10% in 30 days, and Qubic (QUBIC) plunged nearly 30%. Tokens like Render (RNDR) and Bittensor (TAO), which rely on NVIDIA GPUs for decentralized computing and AI training, face potential slowdowns due to possible supply constraints or cost increases.
Beijing's move signals confidence in domestic alternatives from Huawei and Cambricon, with Chinese chipmakers planning to triple AI processor output next year. However, the transition may lead to higher electricity costs and longer training times for AI models in China, potentially stifling innovation. The broader crypto market, particularly altcoins, could suffer if investor sentiment sours on tech and AI sectors, echoing China's 2021 Bitcoin mining ban that triggered weeks of price declines.
