<div id="readability-page-1"><div><div>Nvidia Corp’s NVDA uneasy dance between Washington and Beijing is quickly becoming a market-defining saga for China-focused tech ETFs. The chipmaker is gearing up to ship its new AI chip, likely to be called the B30A processor, next month, according to a Reuters report. This new product will be a China-specific artificial intelligence chip based on its Blackwell architecture. It is an indication of Nvidia’s resolve to stay relevant, competitive and diplomatic in one of its most important markets, even as the U.S. government has slapped a 15% revenue tax on its China sales.Nvidia is in the red today. Check its prices live.Notably, Nvidia had expected relief in July when Washington removed restrictions on its H20 chip. But Beijing’s reaction has been decidedly cold. Reports by Bloomberg The Information indicate that Chinese regulators told leading tech firms, such as Alibaba Group Holding Ltd BABA, Tencent Holdings Ltd TCEHY and ByteDance, to halt the procurement of H20 on the grounds of national security. Even officials have called for restraint in embracing foreign semiconductors for sensitive use, citing long-standing concerns about “backdoors” or spying features, something Nvidia vehemently rejected.This blowback throws a monkey wrench into Nvidia’s China plans. It sends huge ripple effects for investors who own China technology ETFs, specifically the KraneShares CSI China Internet ETF KWEB and the Invesco China Technology ETF CQQQ.<h2>China Tech ETFs In The Crosshairs</h2>Both CQQQ and KWEB are strongly skewed towards the very platforms that are embroiled in Beijing’s crackdown.KWEB’s largest holdings are Tencent (~10.7%), Alibaba (~8.6%), PDD Holdings Inc PDD (~7.5%), Meituan MTNGF (~6.2%), and JD.com Inc JD (~5.2%).CQQQ’s largest holdings are Tencent (~10.0%), PDD (~8.1%), Meituan (~6.9%), and Baidu Inc BIDU (~6.2%).In both instances, approximately 40% of the portfolio is invested in companies that rely heavily on sophisticated GPUs to power their artificial intelligence algorithms, cloud computing platforms, and consumer applications. Disruption of supply for Nvidia’s chips thus has straightforward implications for the growth prospects of these ETFs.<h2>Near-Term Headwinds, Long-Term Transition</h2>In the near term, deferment of H20 buys could push back deployment of AI and decrease traction for cloud services. That might weigh on Alibaba and Tencent’s earnings, as well as those of other platform giants, posing a downside risk to ETFs like KWEB and CQQQ.On the other hand, if Nvidia manages to regain favor with China through its B30A, it will bode well for Chinese tech giants that rely on Nvidia chips for AI-based developments and deployments. This, in turn, will bode well for KWEB and CQQQ.Over the longer term, however, Beijing's message is clear: domestic self-sufficiency is the priority. By pressuring firms to lean on Chinese alternatives such as Huawei's GPUs, regulators are accelerating the pivot toward a homegrown supply chain. Although Chinese GPU makers still lag Nvidia in scale and capability, state-backed funding and policy support could gradually close the gap.For ETF investors, this structural shift means that KWEB and CQQQ will potentially transform from proxies for consumer internet expansion to gauges of technological independence in China. Essentially, China tech ETFs, such as KWEB and CQQQ, appear to be in a win-win situation.<ul> <li>Nvidia’s Reign At Risk? Dylan Patel Says Google’s TPU, Amazon’s Trainium Could Outshine GPUs If Sold To Public</li> </ul>Photo: Shutterstock</div></div></div>

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Nvidia's challenges in China are reshaping the landscape for tech ETFs, particularly KWEB and CQQQ, as Beijing pressures firms to adopt domestic alternatives. The upcoming launch of Nvidia's B30A AI chip aims to maintain its market presence despite U.S. revenue taxes and Chinese regulatory pushback against foreign semiconductors. This situation poses near-term risks for earnings of major players like Alibaba and Tencent, while signaling a long-term shift towards domestic self-sufficiency in China's tech sector, potentially transforming these ETFs into indicators of technological independence.

- Nvidia Corp is preparing to launch its new AI chip, the B30A processor, specifically for the Chinese market, amid rising tensions between the U.S. and China.  
- The U.S. has imposed a 15% revenue tax on Nvidia's China sales, while Chinese regulators have advised major tech firms to halt procurement of Nvidia's H20 chip due to national security concerns.  
- This situation poses risks for China-focused tech ETFs like KWEB and CQQQ, as they heavily rely on companies affected by Nvidia's supply chain disruptions, while also highlighting China's push for domestic semiconductor self-sufficiency.

Nvidia's Dilemma Could Redefine The Future Of China Tech ETFs