China has moved to limit sales of Nvidia’s AI chip designed for its market, following what officials saw as “insulting” comments from a U.S. official about tech exports, the Financial Times reported.
Chinese authorities are urging local tech companies to avoid buying Nvidia’s H20 chip, a lower-spec AI processor made specifically for China. China’s main tech and industry bodies CAC, NDRC, and MIIT responded to Lutnick’s recent comments, according to sources cited by the Financial Times.
On July 15, Lutnick told CNBC that the U.S. doesn’t sell China its top tech, aiming instead to keep Chinese developers dependent on American systems comments made a day after H20 export limits were lifted.
Top Chinese leaders saw the remarks as “insulting” and are now considering restricting local tech companies from buying the H20 chips, sources told the Financial Times. This has led many Chinese firms to delay or sharply reduce their orders.
Nvidia hit a roadblock despite CEO Jensen Huang’s visit to Beijing, where he promised to keep competing in China. After his trip, rising interest from Chinese buyers led TSMC to restart production of the H20 chips, the report said.
Chinese regulators want more homegrown chips, but top companies like Alibaba and ByteDance say cutting off Nvidia’s chips could slow China’s AI development and hurt its competition with the U.S.
A source told the Financial Times that Lutnick’s comments strengthened regulators’ push for tech companies to adopt China-made chips.
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A week after Lutnick’s comments, China’s CAC told major tech companies like ByteDance and Alibaba to pause new Nvidia H20 chip orders over security concerns. On July 31, the CAC met with Nvidia officials, accusing the chips of location tracking and remote shutdown features claims Nvidia rejects.
