NVIDIA Corporation ( NVDA ) shares are trading lower Wednesday after China reportedly banned its leading technology companies from procuring the company’s artificial intelligence (AI) chips.

What To Know: The Cyberspace Administration of China has directed major firms, including ByteDance and Alibaba, to halt testing and orders of Nvidia's ( NVDA ) RTX Pro 6000D. The chip was designed specifically for the Chinese market but is now restricted under the new guidance.

The directive also applies to Nvidia's ( NVDA ) H20, another chip widely used for AI in China. Regulators said domestic semiconductors have reached performance levels comparable to Nvidia's ( NVDA ) offerings in the Chinese market.

Following the announcement, companies instructed suppliers to stop chip-related work, advancing efforts toward a more independent supply chain. The move is part of China's broader strategy to boost its domestic semiconductor industry and reduce reliance on foreign technology.

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NVDA Price Action: At the time of writing, Nvidia ( NVDA ) shares are trading 3.32% lower at $169.07, according to data from Benzinga Pro.

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