Chinese Regulators Block ByteDance from Using Nvidia Chips in New Data Centers

Reviewed byNidhi Govil

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Chinese authorities have prohibited ByteDance from deploying Nvidia chips in new data centers, marking a significant escalation in Beijing's campaign to reduce dependence on US technology. This move comes despite ByteDance being the largest Chinese purchaser of Nvidia chips in 2025.

Regulatory Crackdown on US Technology

Chinese regulators have prohibited ByteDance, the parent company of TikTok, from deploying Nvidia chips in new data centers, according to a report by The Information citing two company employees . This development represents a significant escalation in Beijing's ongoing campaign to reduce Chinese companies' dependence on American technology infrastructure.

Source: VnExpress

Source: VnExpress

The timing of this ban is particularly notable given ByteDance's massive investment in Nvidia hardware. The company purchased more Nvidia chips than any other Chinese firm in 2025, racing to secure computing power for its billion-plus users amid growing concerns that Washington could further restrict chip supplies

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Broader Push Toward Domestic Alternatives

This restriction on ByteDance is part of a wider regulatory pattern that began in August, when Chinese authorities asked local firms to halt new orders of Nvidia AI chips. Since then, regulators have actively pushed companies to adopt homegrown processors instead of relying on American semiconductor technology

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Source: Market Screener

Source: Market Screener

The Chinese government has issued specific guidance requiring new data center projects that receive any state funding to exclusively use domestically-manufactured artificial intelligence chips

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. This policy directive underscores Beijing's determination to build an alternative AI ecosystem and achieve semiconductor self-sufficiency.

Impact on Nvidia's Market Position

The regulatory restrictions have created significant challenges for Nvidia's operations in China. A company spokesperson acknowledged the difficult operating environment, stating that "the regulatory landscape does not allow us to offer a competitive data center GPU in China, leaving that massive market to our rapidly growing foreign competitors"

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Washington has already barred sales of Nvidia's most advanced chips to China, permitting only scaled-down versions such as the H20. Nvidia developed a China-specific chip, the RTX6000D, but demand has remained tepid, with several major technology firms choosing not to place orders

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Geopolitical Context and Trade Relations

This development occurs against the backdrop of ongoing US-China trade tensions, which remain in a fragile pause despite recent diplomatic engagement. President Donald Trump recently indicated following discussions with Chinese President Xi Jinping that Washington would "let them deal with Nvidia but not in terms of the most advanced" chips

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China's accelerated efforts to build domestic AI capabilities reflect broader strategic concerns about technological dependence on the United States. As Washington continues to tighten export controls on advanced semiconductors, Beijing has intensified its push for technological self-reliance, particularly in critical areas like artificial intelligence infrastructure.

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