This content was originally published by Radio Free Asia, and it is now licensed for reprint.
In response to Washington’s approach to stress China amid an ongoing price dispute, the U.S. has tightened its hold on advanced AI technologies industry with Beijing by tightening its grip on the country’s exports of Nvidia’s H20 chips.
The U.S. authorities informed Nvidia on April 9 that exporting its H20 chips to China would then need government approval, according to Nvidia, a world leader in AI device growth. It added that the restriction would continue in effect indefinitely.
Although the H20 chip only has a small amount of processing power, other characteristics allow for the creation of high-performance computing systems.
Apparently, the U.S. government made its decision on concerns that Chinese supercomputers might use or be modified using the H20 chips.
The H20 was the most cutting-edge artificial intelligence chip that could be exported to China, which already faced restrictions on high-end semiconductor sales due to U.S. national security. Although its performance is lower than that of Nvidia’s most recent Blackwell chip, it has high-bandwidth memory that matches that of Blackwell, giving it a boost in some tasks.
Following its use by DeepSeek, a Chinese AI startup, which unveiled a cost-effective and competitive AI model trained using the chip in January, the H20 chip gained attention.
Tech media outlet The Information reported earlier this year that major Chinese tech companies, including Alibaba, Tencent, and ByteDance, placed over US$ 16 billion worth of H20 chip orders in the first quarter alone, an increase of over 40 % from the previous quarter.
Nvidia anticipates losing approximately US$ 5.5 billion in the first quarter of its fiscal year as a result of the new export restrictions.
In October 2022, the United States first placed restrictions on the export of AI chips to China, and it has since expanded the scope of the restrictions to include other nations and technologies.
The H20 chips export restriction comes as trade tensions between the United States and China get worse. Nvidia’s announcement on Monday that it would work with its partners to invest up to US$ 500 billion over the next four years to build AI infrastructure, including supercomputers made in the U.S., is also true.
Trump has imposed severe tariffs on Chinese imports, many of which are currently subject to a total of 145 % in additional levies.
More recently, the Trump administration expanded exemptions for some goods, including laptops and smartphones, from the recently announced 125 % levy, which targets Chinese tech goods.
Trump took further aim at Beijing on Tuesday by claiming that the country had broken promises made in a prior trade agreement that had temporarily put an end to the tariff war during his first term in office from 2016 to 2020.
He claimed that Beijing had only” a portion of what they agreed to buy” and that the previous Biden administration had shown “zero respect” in trade enforcement.
Trump stated in the same post that American farmers were frequently “put on the Front Line with our adversaries, such as China,” during trade disputes, and that he would continue to support U.S. agriculture.
Later that day, Trump turned his attention to a significant aerospace deal, claiming that China had rejected a commitment to Boeing.
They simply reneged on the important Boeing agreement, saying they would” not take possession” of fully-dedicted aircraft, he wrote.
Previous reports from Bloomberg claimed that Chinese authorities had instructed domestic airlines to halt purchases of aircraft-related equipment and parts from American suppliers.
China has imposed a 12 % levy on other U.S. imports and counter-tariffs against American agriculture as retaliation for U.S. actions.
