This article first appeared on GuruFocus.
Nvidia (NVDA, Financials) suppliers have paused output of components for the company’s H200 artificial intelligence chips after Chinese customs authorities blocked the processors from entering the country, according to a Financial Times report citing people familiar with the situation.
The move messes with Nvidia’s supply chain for one of its most powerful AI chips, which was projected to get more than 1 million orders around the world. The H200 is made to power big data centers and AI training systems, so China is still an important market even though U.S. export rules are getting stricter.
The stop in production adds more uncertainty to Nvidia’s business in China, where trade obstacles and regulatory scrutiny have already made it impossible to export high end AI technology. It is said that suppliers are waiting for both governments to provide them more information before they start making things again.
Nvidia still controls the worldwide AI chip market, but stricter export limits could slow its expansion in Asia.