New York: The global tech race could witness a systemic shift as Chinese technology companies are increasingly looking to move away from US-based AI chip suppliers like Nvidia. According to a survey by Bloomberg Intelligence, almost 46% of Chinese executives surveyed say they’d prefer domestically produced chips for their AI accelerator procurement programs, up from 30% earlier.
This development comes after Chinese authorities last year summoned leading internet firms including Tencent and ByteDance to explain the reasons for their purchase of Nvidia’s flagship H20 chips, as they expressed concern about data security.
Once amongst Nvidia’s largest customers, the Chinese AI chips market is now virtually. CEO Jensen Huang had acknowledged the same at the Citadel Securities’ Future of Global Markets event in October 2025.
This, along with the Bloomberg survey report, has seen Nvidia lose nearly $1 trillion in market value in less than 2 months, after becoming the world’s first $5 trillion company in October 2025.
Despite the US clearing ten Chinese companies to purchase Nvidia’s H200 chips in May this year, this hasn’t translated into actual sales, as Chinese enterprises are hesitating to place orders following Beijing’s diktat. Instead, they are looking to source AI inference chips from domestic suppliers like Iluvatar CoreX and Baidu’s Kunlunxin unit.
For Beijing, the push towards domestic procurement aligns with its goal of having at least 80% of its core technologies, including chips supplied by domestic companies. For Nvidia, which once saw almost $17 billion in revenue from China alone, this represents a structural challenge that even diplomacy hasn’t been able to resolve.
