The news: Nvidia is facing a new obstacle in its ability to sell chips to China—Chinese authorities are urging ByteDance, Alibaba, Tencent, and others to halt purchases of Nvidia hardware.

This follows an agreement between President Donald Trump, Nvidia, and AMD that requires the two companies to give the US government a 15% cut of Chinese chip revenues in exchange for permission to sell hardware there, per Bloomberg.

What’s happening: The Trump administration gave Nvidia the green light to sell its H20 chips, which are less powerful than its Blackwell chips, to Chinese companies. Nvidia CEO Jensen Huang told Trump that selling these scaled-down chips to China could maintain the country’s reliance on US technology, per The Information.

But now Chinese regulators seem to be pushing back on that very idea. They’re reportedly concerned not only about strategic dependence, but also about a risk that Nvidia’s hardware could be used to send sensitive data to the US. Nvidia denies its chips have any such vulnerabilities.

Why it matters: Rising regulatory friction and geopolitical tensions could reshape how and where AI tools get built. Marketers should be ready for shifts in buyer needs and tough questions about data security.

Our take: This could change how Chinese tech firms source AI infrastructure, potentially slowing or redirecting development plans—especially if regulators’ urging becomes an outright ban.

Since ByteDance owns TikTok, any restrictions on access to advanced chips could affect its ability to develop and deploy AI models for things like algorithm recommendations, content moderation, and generative AI (genAI) features. Marketers should diversify their AI-powered marketing tools to stay ahead if TikTok’s ad products and UX features develop more slowly.