China banned the RTX 5090D V2 while Nvidia's CEO Jensen Huang was visiting
Chinese customs officials added the RTX 5090D V2 graphics card to their list of banned goods last Friday. The timing of the addition stands out: Nvidia CEO Jensen Huang was in Beijing the same day, in the middle of a two-day round of meetings with Chinese tech leaders.
The RTX 5090D V2 was a version Nvidia developed specifically for the Chinese market. The original RTX 5090 could not be sold to China due to US export restrictions imposed in October 2022. Nvidia deliberately reduced performance to create 'D' (downgraded) variants that fell below those restrictions — first the 5090D and then the 5090D V2.
Chinese customs did not state a justification for the addition. Trade experts are reading the move as part of China's expanding response to US export controls over the past several weeks. Last month China's Ministry of Finance applied a 60 percent extra duty on US-origin semiconductors, significantly raising the price of US chips in the Chinese market.
Huang's visit to Beijing was actually aimed at easing those tensions. The Nvidia CEO has visited China seven times in the past three years. Those visits sit at the centre of Nvidia's strategy to maintain access to the extremely valuable Chinese market. China accounts for roughly 22 percent of the world AI chip market.
Huang's visit programme included meetings with the Ministry of Industry and Information Technology (MIIT) and major tech companies including Tencent, Alibaba and Baidu. The timing of the ban announcement sends a direct message to those meetings: 'We work with you, but through bans like this we will protect our strategic autonomy.'
Nvidia issued no official statement on the ban. The company's revenue from China makes up around 15 percent of its total revenue — more than $25 billion annually. Even though the ban applies only to the 5090D V2, it creates a broader perception of 'uncertainty about access to the Chinese market'.
Chinese alternative chip makers welcomed the ban. Huawei, Cambricon, Biren and other domestic AI chip companies could benefit from a reduction in Nvidia's weight in the Chinese market. Huawei's Ascend 910C chip is around 60 to 70 percent of the performance of Nvidia's H100 and can be produced domestically.
The US administration also reacted to the ban. On Wednesday, the chair of the White House Economic Council said: 'China's arbitrary trade moves are an indicator of an increasingly aggressive policy toward US tech companies. We are examining all options to respond appropriately.'
The impact on the global semiconductor market is likely to remain limited — the RTX 5090D V2 is a small slice of world GPU sales. But there is a risk that broader semiconductor categories will be banned in the next month of the US-China trade war. The bans could be expanded to memory chips, advanced-node logic chips and CPUs.
On the investor side, Nvidia's shares closed down 1.8 percent on Wednesday. AMD and Intel shares rose by a few tens of basis points. Chinese semiconductor shares rose 4 to 7 percent. In the coming weeks Huang is expected to make a call during or after the visit; the call may indicate how Nvidia's China strategy will adapt. This article should be read only as an analysis of trade dynamics, not as a personal investment recommendation.