The recent selloff in Nvidia and Broadcom stock is not just about interest rate jitters or valuation anxiety. It is, at its core, about China escalating what looks increasingly like a deliberate war on U.S. AI champions. Over the past several days, Beijing has launched a series of targeted strikes that undermine the growth engines of these companies, sending a clear signal that Washington’s curbs on Chinese access to advanced semiconductors will be met with countermeasures.
For Nvidia, the blow was unusually sharp. China’s Cyberspace Administration barred its tech giants—including Alibaba and ByteDance—from buying the RTX Pro 6000D chip. This wasn’t an ordinary graphics processor; it was a tailored design, engineered specifically to comply with U.S. export controls while still giving Chinese customers some access to Nvidia’s AI compute. The ban doesn’t just choke sales of one product—it undermines Nvidia’s strategy of keeping one foot in the Chinese market while obeying Washington’s rules. At the same time, China’s antitrust regulator opened a formal probe into whether Nvidia violated conditions of its Mellanox acquisition, invoking its power over a deal between U.S. and Israeli companies that required Chinese approval back in 2020. This is less about “competition law” than about leverage: Beijing is reaching back into the past to create new bargaining chips in the present confrontation.
Broadcom is caught in the same tightening vice. The company is one of the top suppliers of custom accelerators and networking silicon for AI data centers, and much of that business ultimately flows through hyperscalers with exposure to China. Now, Broadcom is among the U.S. semiconductor firms targeted by new Chinese probes into “dumping” and “discrimination” in imports. The wording mirrors Beijing’s past playbook—using trade law as a political weapon. It is no coincidence that this arrives just as Broadcom gains ground in the custom AI chip market, threatening China’s push for domestic alternatives. By placing Broadcom under the regulatory microscope, Beijing signals that no American leader in AI hardware will have a free pass in its market.
The deeper message is strategic. The U.S. has tried to build an “AI stack” of hardware, software, and cloud platforms that dominate globally, locking in Nvidia, Broadcom, and their peers as indispensable suppliers. China sees this as a long-term threat to its sovereignty and economic future. By banning chips, probing old mergers, and opening new trade cases, Beijing is reminding markets that it can disrupt the American AI narrative by blocking access to its massive market and by complicating the global operations of U.S. chip leaders. Each regulatory action is both punishment and deterrent: punishment for the export controls Washington imposes, deterrent against U.S. companies working too closely with their own government’s strategic agenda.
This is why Nvidia and Broadcom stocks have stumbled. Investors aren’t only reacting to the numbers on sales or to Fed policy—they are pricing in the reality of a geopolitical battlefield where China wields regulation as a weapon. Every restriction erodes visibility, every probe creates headline risk, and every ban signals that the world’s largest chip buyer is no longer a reliable source of growth. What looks like a series of legal and bureaucratic steps is in fact a coordinated campaign: a war on America’s AI hardware giants, with Nvidia and Broadcom on the front lines.