NVIDIA’s (NASDAQ:NVDA) new RTX6000D chip, built to comply with US export curbs, is seeing little demand from major Chinese firms, sources familiar with the matter told Reuters this week.
Tests showed it lags the banned RTX5090, which remains widely available through gray market channels at less than half the RTX6000D’s price of roughly 50,000 yuan (around US$7,000).
NVIDIA currently faces a balancing dilemma in China, where the US has barred exports of its most advanced processors to limit Beijing’s artificial intelligence (AI) progress, forcing the company to design downgraded models.
While sell-side analysts had forecast robust demand, including projections of 1.5 million to 2 million RTX6000Ds produced in the second half of 2025, some of China’s biggest technology buyers appear unconvinced.
Instead, tech giants Alibaba (NYSE:BABA), Tencent Holdings (OTC Pink:TCEHY,HKEX:0770) and ByteDance are waiting for clarity on shipments of NVIDIA’s H20, the most powerful AI processor the US has permitted the firm to sell in China.
The US reinstated licenses for the H20 in July, but deliveries have not restarted. Companies are also watching closely to see whether NVIDIA’s B30A, a stronger model still under review in Washington, will win approval.
Chinese tech firms turn to local alternatives
At the same time, NVIDIA is facing a longer-term challenge: leading Chinese firms are beginning to lean more heavily on their own silicon. Alibaba and Baidu (NASDAQ:BIDU) have started using internally designed chips to train AI models, according to the Information, marking a shift away from exclusive reliance on NVIDIA hardware.
Alibaba has deployed its chips for smaller AI models since early this year, while Baidu is experimenting with training new versions of its Ernie AI model using its Kunlun P800 processor.
According to the report, three employees who have worked with Alibaba’s chip said that its performance is now competitive with NVIDIA’s H20, a sign of the rapid improvement in China’s homegrown designs.
Neither Alibaba nor Baidu responded to requests for comment from Reuters.
In response to the report, NVIDIA said: “The competition has undeniably arrived … We’ll continue to work to earn the trust and support of mainstream developers everywhere.”
Although most companies still rely on NVIDIA chips for their most advanced systems, Beijing has made clear that it wants its local firms to reduce dependence on foreign suppliers by adopting domestic alternatives where feasible.
Regulatory pressure from Beijing
Compounding NVIDIA’s difficulties, China’s market regulator has accused the US chipmaker of violating anti-monopoly laws. The watchdog did not specify what conduct was under investigation, but said it will continue its probe.
NVIDIA refuted the allegations, stating that it has complied with Chinese law “in all respects” and pledging to cooperate with “all relevant government agencies.”
The company has been under scrutiny in China since December, when regulators launched an initial inquiry seen as a countermeasure in the wider semiconductor standoff with Washington.
NVIDIA CEO Jensen Huang said late last month that discussions with the White House over licensing a less advanced version of its next-generation chip for China “will take time.”
Separately, the company has reportedly struck a deal with US President Donald Trump to exchange 15 percent of its China sales revenue from H20 chips in return for export approvals.
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Securities Disclosure: I, Giann Liguid, hold no direct investment interest in any company mentioned in this article.
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