Chinese companies aren't interested in Nvidia's slower AI chips

Nvidia's earnings may be impacted this year.

Nvidia recently unveiled the GeForce RTX 4090 D chip, a slower, less powerful version of a gaming processor that complies with US export controls and can be sold in China.

But Chinese firms like Alibaba, Tencent, Baidu, and TikTok owner ByteDance have suggested that they're not interested in the product.

By downgrading its chips, there is far less of a performance gap compared with locally-made, Chinese alternatives, meaning the companies may start to shop at home instead, the Wall Street Journal reported.

The Biden Administration has made it clear that it's aiming to slow China's technological advancements, introducing a series of export restrictions in October aimed at stunting the country's chip industry.

China has been a crucial market for Nvidia, making up around 20% of the company's revenue, Huang said recently, per Reuters.

The California company has also enjoyed a more than 90% share of China's $7 billion AI chip market.