How Should You Play NVDA Stock Amid Reports That China Banned ByteDance from Using Nvidia GPUs?

In its quest for self-reliance in the semiconductor space, China has mandated its state-funded data center companies to use only locally made artificial intelligence (AI) chips. This directive has also unofficially been passed on to private companies. One consequence of this was on display when ByteDance, the parent company of TikTok, was asked to stop using Nvidia (NVDA) chips in its data centers. 

Nvidia has historically generated about 13% of its revenue from China. This is a significant number, but it's on the decline. Going forward, this number will likely drop further, as ByteDance was Nvidia's largest Chinese customer. This is a tough pill for Nvidia investors to swallow, but it was inevitable.