This article was originally published by Radio Free Asia and is reprinted with permission.
The U.S. has imposed restrictions on the export of Nvidia’s H20 chips to China, tightening its grip on advanced AI technology trade with Beijing as part of Washington’s strategy to pressure China amid an ongoing tariff battle.
Nvidia, a global leader in AI chip development, said Tuesday it was notified by the U.S. government on April 9 that exporting its H20 chips to China would now require government approval. It separately said that the restriction would remain in place indefinitely.
While the H20 chip has relatively modest computing power, it has other features that make it suitable for building high-performance computing systems.
The U.S. government reportedly based its decision on concerns that the H20 chips could be used in or adapted for Chinese supercomputers.
Until now, the H20 was the most advanced artificial intelligence chip legally exportable to China, which already faced U.S. national security-driven curbs on high-end semiconductor sales. Although its performance is below Nvidia’s latest Blackwell chip, it is equipped with high-bandwidth memory similar to that used in Blackwell, giving it a performance boost in certain tasks.
The H20 chip gained attention following its use by DeepSeek, a Chinese AI startup, which in January unveiled a cost-effective and competitive AI model trained using the chip.
Earlier this year, tech media outlet The Information reported that major Chinese tech companies, including Alibaba, Tencent, and ByteDance, collectively placed over US$16 billion worth of H20 chip orders in the first quarter alone – a surge of over 40% from the previous quarter.
As a result of the new export restrictions, Nvidia expects to incur a loss of approximately US$5.5 billion in the first quarter of its fiscal year.
The U.S. first imposed AI chip export controls targeting China in October 2022 and has since broadened the scope of the restrictions to cover additional technologies and countries.
The export restriction on H20 chips comes as U.S.-China trade tensions intensify. It is also despite Nvidia’s announcement Monday that it plans to work with its partners to invest up to US$500 billion over the next four years to build AI infrastructure, including supercomputers manufactured in the U.S.
Trump has imposed steep tariffs on Chinese imports, many of which now face a total of 145% in additional levies.
More recently, the Trump administration expanded exemptions for certain products – including smartphones and laptops – excluding them from a global 10% duty and the newly announced 125% levy targeting Chinese tech goods.
On Tuesday, Trump took further aim at Beijing, posting on his Truth Social platform that China had failed to fulfill commitments under a prior trade agreement that temporarily halted the tariff war during his first term from 2016-2020.
He said Beijing had purchased only “a portion of what they agreed to buy,” and criticized the previous Biden administration for showing “zero respect” in trade enforcement.
In the same post, Trump said that American farmers were often “put on the Front Line with our adversaries, such as China,” during trade conflicts – pledging continued support for U.S. agriculture.
Later that day, Trump turned his focus to a major aerospace deal,saying that China had backed out of a previously committed agreement with Boeing.
“They just reneged on the big Boeing deal, saying they will ‘not take possession’ of fully committed-to aircraft,” he wrote.
Bloomberg earlier reported that Chinese authorities had instructed domestic airlines to stop taking deliveries of Boeing jets, and to pause purchases of aircraft-related equipment and parts from U.S. suppliers.
In retaliation against U.S. actions, China has introduced counter-tariffs targeting American agriculture and imposed a 125% levy on other U.S. imports.
