US-China Chip War Intensifies: Nvidia Caught in the Crossfire

U.S. Senate passes bill that forces AI chipmakers to prioritize sales to American companies -- House now set to amend or pass legislation

The United States Senate has just passed the 'GAIN AI' legislation as part of the National Defense Authorization Act (NDAA), which would require AI chipmakers like Nvidia and AMD to prioritize chip orders for American companies over export orders, particularly to China and its allies. As reported by Bloomberg, the bipartisan bill sailed easily through the Senate and is now under consideration by the House. "Today, the Senate acted to make sure American customers -- including small businesses and startups -- aren't forced to wait in line behind China's tech giants when purchasing the latest AI chips," Senator Elizabeth Warren (D-MA), who co-sponsored the bill, said in a statement. Senator Jim Bank (R-IN), who is the lead co-sponsor of the bill, also noted that this bill will bolster the U.S. competitiveness in AI and other cutting-edge industries while reducing exports to U.S. rivals, particularly China. The House of Representatives has already passed its version of the NDAA, but the provision saying that chipmakers must put exports on the back burner in favor of local sales is missing. Because of this, the two chambers must now work together to create a compromise, but whether this rule will be part of the final version that will be signed by the president is still up for debate. Nvidia has always criticized this bill, saying that its global sales "do not deprive U.S. customers of anything" and that the logic behind it was "based on doomer science fiction." The company also said that it was "trying to solve a problem that does not exist" and that it would "restrict competition worldwide in any industry that uses mainstream computing chips." Nvidia has said that its H20 shipments do not affect the supply of H100, H200, and Blackwell chips, which makes sense as these all use different parts, and that the supply of one will not affect the supply of the other. Although China is Nvidia's largest market next to the U.S., its China sales still dwarf in comparison. The United States accounts for nearly half of Nvidia's sales in FY 2024, while China is only at 13% of its overall revenue. Aside from that, this might go down in the near future owing to the ongoing trade war between Washington and Beijing, especially as the latter has banned its biggest tech companies from acquiring Nvidia's latest chips.

China, US put Nvidia between rock and hard place ... again

Xi to the left of me, Trump is to the right; Huang I am, stuck in the middle with GPUs The US Senate has passed a provision that would give US firms first dibs on advanced chips, just as China tightens customs checks on Nvidia GPUs, leaving the company caught between competing policies across the Pacific. The Guaranteeing Access and Innovation for National Artificial Intelligence (GAIN AI) Act of 2025 didn't get its own standalone vote in the US Senate, instead being passed as part of the FY 2026 National Defense Authorization Act (NDAA), which scored Senate approval in a vote on Thursday despite opposition from Nvidia, which argued to The Register that the rule was a "self-defeating policy based on doomer science fiction," like the now-terminated AI Diffusion Rule that came before it. On the other side of the Pacific, China has reportedly taken action to enforce guidance issued in September from the government to cut off the flow of Nvidia AI chips being purchased by firms like Alibaba, ByteDance, and others. According to the Financial Times, Chinese customs officials have stepped up inspections of semiconductor shipments with the aim of restricting imports of Nvidia chips, be they designed for the Chinese market in order to comply with US export control rules or not. China is moving faster, while the United States is unlikely to pass the GAIN AI Act or the NDAA into law, given the current government shutdown and House Speaker Mike Johnson's (R-LA) insistence that the lower chamber won't return until the Senate passes a bill to fund the US federal government. While the House passed its own version of the NDAA in September, that bill didn't include the GAIN AI Act; both chambers would need to agree to its inclusion to move the bill along, meaning that its future is still uncertain. Beijing has recently tightened scrutiny of Nvidia chip imports. Along with customs crackdowns and requests that Sino firms stop buying chips from the GPU giant, China also launched an antitrust investigation into Nvidia late last year. Chinese antitrust regulators have since said that their investigation preliminarily found Nvidia may have violated Chinese law through its 2020 acquisition of networking hardware firm Mellanox. With Nvidia facing increased heat from US export regulators and a Chinese government increasingly intent on keeping US-made chips out of sensitive AI workloads, companies like Alibaba have turned toward developing their own chips to escape reliance on Nvidia. Like US regulators, Chinese officials are worried that their rival on the world stage could use kit manufactured in a country of concern to spy on the opposition, shut down systems, and otherwise sabotage key computing resources. Unfortunately for the Middle Kingdom, not all of Chinese firms' efforts to go domestic with their chip supply chains appear to be fully self-reliant, as pointed out by TechInsights last week. According to the Canadian analytics firm's report, which isn't publicly available but was reported by Bloomberg last week, samples of Huawei's Ascend 910C chips, designed as a Chinese alternative to Nvidia's H100 series, contain a number of foreign-made parts, with components from TSMC, Samsung, and SK Hynix, all found when tearing a 910C apart. Without debating the veracity of the report, China's Ministry of Commerce added TechInsights to its list of unreliable entities yesterday, barring Chinese companies and individuals from doing any business with the firm, which definitely wasn't a move to prevent another embarrassing teardown. ®

China launches customs crackdown on Nvidia AI chips

China has stepped up the enforcement of its controls on chip imports, as Beijing seeks to wean the country's technology companies away from US products such as Nvidia's artificial intelligence processors. Teams of customs officers have been mobilised at major ports across the country in the past few weeks to carry out stringent checks on semiconductor shipments, according to three people with knowledge of the matter. The inspections started with the goal of ensuring that local companies stop ordering Nvidia's China-specific chips following guidance from Chinese regulators to discourage their purchase, said the people. The targeted processors -- Nvidia's H20 and RTX Pro 6000D -- are designed to adhere to US export controls and maintain the Silicon Valley chipmaker's market share in China. But one person said the checks had been extended more recently to all advanced semiconductor products, to also better target the smuggling of high-end chips that breach US export curbs. Chinese customs had previously done little to prevent chip imports as long as appropriate duties were paid at the border. The Financial Times reported that at least $1bn worth of Nvidia's top AI chips were smuggled and sold in China in the three months from May. The border crackdown further marks Beijing's determination to ensure its tech companies break free from relying on American technology and help the country win the AI race against the US. China is seeking to put its resources behind domestic chipmakers, so they catch up in product performance and manufacturing capacity. In addition to tightened border controls, some customs officials also looked at whether companies had made false declarations in the past about the import of advanced semiconductor products, said two of the people familiar with the inspections. US quants trading giant Tower Research has been investigated for alleged smuggling of hardware including advanced chips, the FT reported last week. The probe was part of this new wave of import controls. China's regulators led by Cyberspace Administration of China (CAC), the internet watchdog, told tech companies led by ByteDance and Alibaba in mid-September to terminate their orders and testing for all Nvidia products. The new border controls have been carried out as a co-ordinated effort alongside the CAC. The regulator's guidance came just two months after Nvidia announced an earlier US export ban on H20 had been lifted by the Trump administration, while also introducing the RTX Pro 6000D, another watered-down AI chip for China. The latest moves have occurred as senior officials in Beijing have determined that domestic chips have reached performance standards that compare with Nvidia's China-specific chips. China also aims to triple its production of advanced semiconductors next year, in a move designed to fill the demand left by Nvidia, the FT reported last month. While Nvidia no longer includes China in its future revenue projection, it recorded $4.6bn in the first quarter of this fiscal year from selling H20 to China, its fourth-largest market, before the US temporarily restricted sales. China's customs did not respond to requests for comment. Nvidia declined to comment.

NVIDIA Faces Growing Restrictions in China Over AI Chip Imports

NVIDIA's relationship with China has taken a sharp turn as the Chinese government reportedly moves to restrict the import of its AI chips, particularly the RTX 6000D and H20 models. Sources cited by the Financial Times claim that Chinese customs authorities are now subjecting all semiconductor imports to increased scrutiny to ensure that domestic firms are not acquiring restricted NVIDIA hardware. These measures come amid growing efforts by Beijing to accelerate the development of a fully localized AI semiconductor supply chain. In August 2025, Chinese regulators launched an official investigation into NVIDIA's H20 accelerator, which was designed specifically for compliance with U.S. export controls. The H20 was meant to serve as a legal option for Chinese firms following U.S. restrictions on high-performance chips such as the A100 and H100. However, recent reports suggest that Beijing has chosen to discourage reliance on NVIDIA hardware altogether, prioritizing the growth of domestic suppliers like Huawei, Biren, and Cambricon. Major technology companies -- including Tencent, ByteDance, and Alibaba -- are said to have received direct instructions from government authorities to cancel pending NVIDIA orders and redirect procurement toward homegrown solutions. This decision underscores China's intent to cultivate an independent AI computing ecosystem, even if it means short-term performance trade-offs. While the push for self-reliance aligns with China's long-term industrial policy, the transition poses immediate challenges. NVIDIA's hardware dominance extends beyond raw compute performance; its proprietary CUDA software ecosystem remains the foundation for most global AI development. Training and deploying large-scale models still depend heavily on CUDA-optimized frameworks that Chinese alternatives have yet to replicate in full. Analysts note that Huawei's Ascend series and Cambricon's AI accelerators have improved substantially but remain behind NVIDIA's flagship architectures in efficiency, scalability, and software maturity. As a result, Chinese AI companies are expected to continue using existing NVIDIA inventory for ongoing projects, at least until domestic solutions achieve comparable capabilities. Despite NVIDIA CEO Jensen Huang's repeated public statements advocating cooperation with China, the government's recent stance reflects a wider geopolitical strategy to minimize exposure to U.S. technology dependencies. By restricting the inflow of foreign AI chips, Beijing hopes to force local firms to accelerate domestic R&D and manufacturing. However, experts warn that this may slow down China's short-term progress in large-scale AI model training due to hardware shortages and software fragmentation. The current situation illustrates how technology and geopolitics continue to intersect in the AI hardware market. As China intensifies its efforts to promote homegrown innovation, NVIDIA faces growing uncertainty in one of its largest markets -- a challenge that could reshape the global AI supply chain over the coming years.

China steps up customs crackdown on Nvidia AI chips: Financial Times

China is increasing its enforcement of chip import restrictions, aiming to move its tech firms away from relying on US products. According to the Financial Times, this includes reducing dependence on Nvidia's AI chips, as Beijing pushes for more control over the country's access to foreign technology. China has ramped up enforcement of its chip import restrictions, aiming to reduce domestic technology companies' dependence on U.S. products such as Nvidia's artificial intelligence processors, the Financial Times reported on Friday. Reuters could not immediately verify the report. Teams of customs officers have been mobilized at major ports across the country in recent few weeks to carry out stringent checks on semiconductor shipments, the newspaper said, citing people with knowledge of the matter. The inspections were initiated with the aim of ensuring local companies halt their purchases of China-specific Nvidia chips following guidance from regulators, according to the FT report. China customs and Nvidia did not immediately respond to Reuters' request for comment. China's regulators, led by the Cyberspace Administration of China (CAC), instructed major tech firms including ByteDance and Alibaba in mid-September to halt orders and testing of Nvidia products, the report said, adding that customs checks have been widened to include all advanced semiconductor products.

China Escalates Crackdown on NVIDIA AI Chips, Intensifying Customs Inspections of RTX 6000D & H20 Models

It appears that Beijing isn't backing down from preventing the use of NVIDIA's AI chips on domestic grounds, as a new report indicates that enforcement controls have intensified. The situation for NVIDIA in China has evolved dramatically over the past few months, as the resistance to AI chip adoption is now coming from Beijing itself. For those unaware, it all started when China's domestic regulatory authorities opened an investigation into NVIDIA's H20 AI chip, and since then, domestic tech giants have been persuaded by the administration to switch towards in-house alternatives. According to a report by the Financial Times, China's customs officers are specifically scrutinizing semiconductor-based shipments to ensure that local companies aren't ordering NVIDIA's AI chips, particularly the RTX 6000D and H20 models. Interestingly, the report claims that Chinese customs previously had few measures implemented to block the flow of NVIDIA's GPUs into the region, which led to almost $1 billion worth of chips being smuggled and sold in the three months from May. Chinese tech giants such as Tencent, ByteDance, and Alibaba have already been instructed by authorities to cancel their orders of NVIDIA's offerings, and as a result, the nation is currently reliant on its existing inventory for AI computation. The recent measures indicate that Beijing has decided not to follow the 'NVIDIA route', which is one of the reasons why domestic firms like Huawei and Cambricon have accelerated their efforts to develop capable solutions for Chinese customers. But, based on the reports we have seen, relying entirely on a domestic tech stack is currently impossible for China's AI industry. NVIDIA holds an edge in several aspects, not just computational performance, since Team Green has a dedicated ecosystem that comprises hardware and the CUDA lock-in. Firms like Huawei are trying to find workarounds for this, but it is a multi-year effort, and domestic tech giants are still heavily reliant on chips from Team Green.

China Targets Nvidia's H20, RTX Pro 6000D Chips In Customs Crackdown As It Pushes To Cut Reliance On US Technology: Report - Alibaba Gr Hldgs (NYSE:BABA), NVIDIA (NASDAQ:NVDA)

China has reportedly launched a sweeping customs crackdown on Nvidia Corporation's (NASDAQ:NVDA) AI chips. Beijing Launches Nationwide AI Chip Inspection Drive Teams of Chinese customs officers have been mobilized at major ports across the country to conduct stricter inspections of semiconductor imports, reported the Financial Times, citing three people with knowledge of the matter. The initial focus was Nvidia's China-specific AI processors -- the H20 and RTX Pro 6000D -- which were designed to comply with U.S. export controls. The checks, which began in the past few weeks, were aimed at ensuring Chinese companies stop ordering these Nvidia products following guidance from regulators discouraging their purchase. Officials have since widened the inspections to include all advanced chips to prevent smuggling of restricted U.S. hardware. One source told the publication that customs officials are now checking for false declarations and potential smuggling violations. An Nvidia spokesperson declined to provide a comment to Benzinga. See Also: Mitch McConnell Says Trump Tariffs-Ushered Era Has 'Similarities' With The 1930s China Moves To Replace Nvidia With Domestic Chips The crackdown comes after Beijing's Cyberspace Administration of China (CAC) instructed leading tech companies -- including ByteDance and Alibaba Group Holding Ltd. (NYSE:BABA) -- to terminate orders and testing of all Nvidia products in mid-September. Chinese authorities are reportedly convinced that domestic semiconductor firms have reached performance levels comparable to Nvidia's downgraded China-only chips. Beijing now plans to triple production of advanced semiconductors next year to fill the demand gap left by Nvidia's exit. Previously, it was reported that at least $1 billion worth of Nvidia's top-tier AI chips were smuggled into China over three months from May, prompting the intensified enforcement effort. Nvidia Downplays Impact, Says China Revenue Is Already Zero Earlier this week, Nvidia CEO Jensen Huang told CNBC's Jim Cramer that the company's financial guidance already assumes "China zero" revenue due to ongoing export restrictions. Huang also warned that a complete ban on U.S. chip exports could ultimately harm American firms more than their Chinese counterparts. In August, Nvidia said it expects third-quarter revenue to fall between $52.92 billion and $55.08 billion, compared to the Street consensus of $52.96 billion. The outlook excludes any contribution from H20 shipments to China. Price Action: Despite mounting regulatory headwinds, Nvidia remains the world's most valuable chipmaker, with a market capitalization of about $4.68 trillion. Shares have climbed more than 42% over the past year and are up 39% so far in 2025, according to Benzinga Pro. Benzinga's Edge Stock Rankings show Nvidia scoring in the 97th percentile for Growth and 93rd for Quality, underscoring its dominance in the global AI chip race even as geopolitical risks intensify. Read next: Apple May See Fewer Searches In Safari, But Google CEO Sundar Pichai Insists AI Is Fueling Overall Query Growth: 'Far From A Zero-Sum Game' Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors. Photo courtesy: JRdes / Shutterstock BABAAlibaba Group Holding Ltd$174.200.30%OverviewNVDANVIDIA Corp$192.900.17%Market News and Data brought to you by Benzinga APIs

China Tightens Checks On Chip Imports

Listen on the go! A daily podcast of Wall Street Breakfast will be available by 8:00 a.m. on Seeking Alpha, iTunes, Spotify. Up for a challenge? Test your knowledge on the biggest events in the investing world over the past week. Take the newest Seeking Alpha News Quiz and see how you stack up against the competition. China is stepping up enforcement of its import controls on semiconductors - including Nvidia's (NVDA) AI chips - with customs officers conducting stringent checks at all major ports, the Financial Times reported. The crackdown signals Beijing's resolve to ensure Chinese companies end their dependence on U.S. technology, while tightening its rein on the semiconductor supply chain. Stricter checks: The inspections initially aimed to ensure that local companies don't order Nvidia's chips tailored for the Chinese market - H20 and RTX Pro 6000D. China's internet regulator last month directed local firms, including Alibaba (BABA) and ByteDance (BDNCE), to stop buying these chips and cancel existing orders. Senior officials believe local chips have reached performance standards that compare with Nvidia's China-specific chips. But customs inspections have recently extended to all advanced semiconductor products to better target smuggling of high-end U.S. chips. Some customs officials are looking into whether companies made false declarations about advanced semiconductor imports in the past. At least $1B worth of Nvidia's top AI chips were reportedly smuggled and sold in China in the three months from May. At the time, the B200 was the most sought-after chip in the Chinese black market. America first: Over in the U.S., the Senate passed bipartisan legislation requiring advanced AI chipmakers such as Nvidia and AMD (AMD) to prioritize American customers over Chinese buyers. The measure was approved as part of the annual defense policy bill. But the measure's future remains uncertain, as the House of Representatives passed its own version of the defense bill without the export-control provisions. Lawmakers from both chambers must now reconcile the differences before sending a final bill to President Donald Trump. Here's the latest Seeking Alpha analysis

China targets Nvidia, Qualcomm in crackdown on US chip imports

China is boosting its crackdown on US chip imports - launching an antitrust investigation into Qualcomm and deploying customs officials to ports to weed out Nvidia processors. China's market regulator said Friday it was investigating whether Qualcomm's acquisition of Israeli chip maker Autotalks marked a violation of Chinese antitrust law. Shares in San Diego, Calif.-based Qualcomm fell 1.3% in the morning. Qualcomm, which sells smartphone chips to major Chinese companies like Xiaomi, took control of Autotalks in June, about two years after the deal was announced. A spokesperson for Qualcomm said the company is cooperating with Chinese regulators on the investigation. "Qualcomm is committed to supporting the development and growth of our customers and partners," the spokesperson told The Post in a statement. The new probe comes after China's State Administration of Market Regulation claimed in September that Nvidia had violated antitrust laws with its acquisition of Mellanox, a deal aimed at boosting the chip titan's data center efficiency. Recent weeks have seen China reportedly increase its efforts to clamp down on chip imports from Jensen Huang's Nvidia. Authorities have stationed extra teams of customs officials at ports across the country to check semiconductor shipments, three people with knowledge of the matter told the Financial Times. On Friday, China announced it will start charging US ships for docking at Chinese ports, whether they carry microchips or not. The policy is set to take effect on Oct. 14 -- the same day US port fees on China start. The Chinese Ministry of Transport blasted the US fees as "seriously" violating global trading principles and damaging US-China maritime trade, according to CNBC. On the domestic front, Chinese regulators have reportedly been encouraging companies to stop ordering Nvidia chips, including the China-specific variants that were designed to pass stricter export restrictions. Nvidia's H20 and RTX Pro 6000D are considered watered-down versions of the chips the company can sell in the US. They were designed to comply with new American controls that limit exports of advanced chips, a move sparked by fears that China could edge ahead in the AI race. Meanwhile, Beijing has been working to build up its AI capabilities and reduce its reliance on America. Chinese customs officials are checking all semiconductor products in order to track down smuggled advanced chips that breach US export curbs, a person familiar with the matter told the Financial Times. That's a stark contrast from earlier in the year, when China reportedly accepted at least $1 billion worth of Nvidia's top AI chips that skirted US restrictions in the three months from May, the Financial Times previously reported. A Nvidia spokesperson declined to comment. President Trump and his Chinese counterpart Xi Jinping had been expected to meet in person during the Asia-Pacific Economic Cooperation forum during the last week of October in South Korea -- but the US commander-in-chief threw major doubt on those plans on Friday. Trump said there's "no reason" for the meeting as he threatened to increase tariffs and impose export controls on China in the wake of Beijing's latest restrictions on rare-earth materials. China has been trying to triple its production of advanced semiconductors next year, to fill the void left by Nvidia, the Financial Times previously reported. Top Chinese officials have claimed that chips manufactured domestically have reached performance metrics that compare with Nvidia's processors. It has also launched investigations into Chinese companies that it suspects smuggled in advanced US chips, two people familiar with the inspections told the news outlet.

Nvidia AI chips targeted in China customs crackdown- FT By Investing.com

Investing.com-- NVIDIA Corporation's (NASDAQ:NVDA) artificial intelligence chips were subject to increased scrutiny from China's customs authorities in recent weeks, the Financial Times reported on Friday, as Beijing seeks to further wean local developers off U.S.-made processors. Teams of customs officers were mobilized at major ports across the country in recent weeks to carry out stringent checks on semiconductor shipments, the FT reported, citing three people with knowledge of the matter. The inspections are aimed at ensuring local companies do not order Nvidia's China-specific chips- mainly the H20 and the RTX Pro 6000D- following heightened opposition towards the products by Chinese regulators. But the FT report said the checks were extended to cover all advanced chip imports, to also better target the smuggling in of goods that breach U.S. export controls. Nvidia's China-specific chips are made in line with U.S. restrictions on AI chip sales to China. But Beijing balked at these restrictions and had begun encouraging developers to use Chinese chips instead, calling the issue a matter of national security. While Nvidia was authorized to resume selling chips to China earlier this year, the company has found limited demand, at least on official fronts. Beijing was also seen ramping up investment in local chipmakers, with developers such as Huawei, Cambricon Technologies, and Semiconductor Manufacturing International Corp (HK:0981) seen at the forefront of this push. Reports earlier this year suggested that Beijing's new aversion to U.S. chips was motivated by seemingly insulting remarks from U.S. commerce secretary Howard Lutnick on chip sales to China. But this has left Nvidia walking a tightrope between U.S. export restrictions and Chinese regulatory aversion. China still represents a major market for the chipmaker.

China steps up customs crackdown on Nvidia AI chips, FT reports

(Reuters) -China has ramped up enforcement of its chip import restrictions, aiming to reduce domestic technology companies' dependence on U.S. products such as Nvidia's artificial intelligence processors, the Financial Times reported on Friday. Reuters could not immediately verify the report. Teams of customs officers have been mobilized at major ports across the country in recent few weeks to carry out stringent checks on semiconductor shipments, the newspaper said, citing people with knowledge of the matter. The inspections were initiated with the aim of ensuring local companies halt their purchases of China-specific Nvidia chips following guidance from regulators, according to the FT report. China customs and Nvidia did not immediately respond to Reuters' request for comment. China's regulators, led by the Cyberspace Administration of China (CAC), instructed major tech firms including ByteDance and Alibaba in mid-September to halt orders and testing of Nvidia products, the report said, adding that customs checks have been widened to include all advanced semiconductor products. (Reporting by Ananya Palyekar in Bengaluru; Editing by Mrigank Dhaniwala and Sherry Jacob-Phillips)