Key Points
- China is reportedly urging its companies to avoid using Nvidia’s H20 AI chips.
- This comes just a month after the U.S. allowed Nvidia to resume selling the chips to China.
- Beijing is concerned about potential security risks and “backdoors” in the chips.
- The move is a clear signal that China is pushing for tech self-sufficiency and supporting domestic chipmakers like Huawei.
Just a month after the U.S. government gave Nvidia the green light to resume selling its H20 AI chips to China, Beijing is making it clear the company will not be getting a warm welcome. China is now reportedly urging its companies to avoid using Nvidia’s chips, especially for government and national security purposes.
This new pushback comes just weeks after Chinese officials summoned Nvidia to a meeting to discuss their fears about hidden “backdoors” or tracking technology in the chips.
Chinese regulators have even ordered major tech companies like ByteDance and Alibaba to stop buying Nvidia chips altogether. At the same time, they conduct a national security review.
This is a major headache for Nvidia, which had hoped to regain its market share in the massive Chinese market. But it’s also a clear signal that Beijing is serious about its goal of tech self-sufficiency. Analysts say China is telling its tech firms they must support domestic chipmakers like Huawei, even if Nvidia’s products are better.
The move complicates the Trump administration’s strategy, which was to get China “addicted” to U.S. technology by allowing sales of less-advanced chips. It also comes as the White House is working on a deal to take a 15% cut of Nvidia’s China revenue.
Despite the tough talk from Beijing, most experts doubt there will be a long-term, all-out ban on Nvidia’s chips. China’s domestic chip industry is still playing catch-up, and for now, it can’t meet the huge demand for AI computing power on its own.
