Beijing is reportedly discouraging Chinese tech companies from purchasing Nvidia's H20 AI chips. This action follows comments from a US official, which have seemingly triggered a regulatory response. The Chinese government is now urging local firms to justify their need for Nvidia's H20 chips over domestic alternatives, such as those developed by Huawei.
China's concerns reportedly revolve around security issues and the desire to bolster its domestic semiconductor industry. There are fears that American chips could be vulnerable to hacking or include kill switches. Simultaneously, China is investing heavily in its own chip manufacturing capabilities, aiming to compete with Nvidia in the AI chip market.
Nvidia's H20 chip was designed to comply with US export restrictions, but the recent developments indicate a shift in China's stance. This could significantly impact Nvidia, which relies on the Chinese market for a substantial portion of its revenue. Nvidia is reportedly developing a new AI chip for China that is more powerful than the H20. The new product is tentatively called the B30A.
