China has reportedly asked numerous Chinese tech companies to halt orders for Nvidia (NVDA) H200 AI chip purchases. The country is expected to mandate domestic artificial intelligence chip purchases, the Information reported on Wednesday, citing people familiar with the matter.
Back in December, Nvidia was granted permission by the US to resume its chip sales in China. As a result, the company increased its chip output to account for the expected surge in sales. However, China’s request for its companies to pause buying the chips could raise a red flag for Nvidia, especially depending on how long China wants the halt to last.
Per The Information, China’s directive to suspend orders was issued as the government considers whether, and under what conditions, to allow access to Nvidia’s high-performance chips. Beijing is aiming to discourage local technology companies from rushing to stockpile U.S. chips before a decision is reached, The Information’s report added.
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Furthermore, Nvidia CEO Jensen Huang said at the Consumer Electronics Show this week that demand in China for its H200 chip was strong. He also added that the company is viewing purchase orders as a signal of approval rather than expecting any formal announcement from Beijing. Thus, the report of China requesting its companies to halt Nvidia chip purchases was a surprise, and one that could take a toll on NVDA stock.
Indeed, Nvidia stock was expected to surge with the boost from chip sales in China. In the past month, shares have only been up 1.4%. There are several bullish stock forecasts for NVDA, with some forecasting growth of over 50% in 2026. With the AI bubble not looking like it will slow down anytime soon, Nvidia’s 2026 potential remains high.