TECH NEWS – The Chinese Communist Party is increasingly viewing Nvidia’s AI chips with suspicion, resulting in more stringent customs inspections.

It appears that Beijing is not backing down from its efforts to prevent the domestic use of Nvidia AI chips, as customs inspections are reportedly being stepped up. Nvidia’s situation in China has changed dramatically in recent months, with resistance to the introduction of AI chips now coming from Beijing. It began when Chinese regulators launched an investigation into Nvidia’s H20 AI chip. Since then, the government has persuaded domestic tech giants to switch to domestic alternatives.

According to the Financial Times, Chinese customs officials are strictly inspecting shipments of semiconductors to ensure local companies are not ordering Nvidia AI chips, mainly the RTX 6000D and H20 models. Notably, Chinese customs authorities previously took few measures to prevent Nvidia GPUs from entering the region. As a result, nearly $1 billion worth of chips were smuggled in and sold in the three months since May.

Tech giants in China, such as Tencent, ByteDance, and Alibaba, have been instructed by authorities to cancel their orders for Nvidia products. As a result, the country is currently relying on its existing stock for AI computing. These latest measures suggest that Beijing has decided not to follow Nvidia’s path. This is one reason why domestic companies, such as Huawei and Cambricon, have accelerated their efforts to develop solutions for Chinese customers. However, it is currently impossible for the Chinese AI industry to rely entirely on domestic technology.

Nvidia has an advantage in several areas, not only in terms of computing power, but also because it has a dedicated ecosystem that includes hardware and CUDA lock-in. Companies such as Huawei are trying to find a solution, but it will take years, and in the meantime, Chinese tech giants will continue to rely heavily on Nvidia chips.

Source: WCCFTech, FT