Chinese authorities stepped up warnings to local businesses to avoid purchasing Nvidia’s AI chips designed for the local market, following a comment by US Commerce Secretary Howard Lutnick about getting mainland companies “addicted” to US chips.
The Financial Times reported Lutnick as saying the US wants to sell China “enough that their developers get addicted to the American technology stack”. He also declared the US doesn’t sell China “even our third-best” stuff.
The comments prompted local regulators to press companies to stop buying Nvidia’s H20 processors.
The accelerated push against US AI chips comes just weeks after Nvidia sealed a deal with Washington to receive a licence to restart exports of its H20 chips to the mainland in exchange for paying a 15 per cent levy.
Meanwhile, Nvidia, forecasting lower than expected demand, ordered Samsung Electronics, Foxconn and Amkor Technology, which manages advanced chip packaging, to halt production work related to the H20, Reuters stated.
In late July, Nvidia told its Taiwan-based contract manufacturer to restart production of the H20 in anticipation of receiving an export licence.
After a Chinese regulator claimed US AI experts revealed the Nvidia’s chips have mature tracking, location and remote shutdown features, the company repeatedly insisted its chips have no backdoors allowing remote access.
The Chinese government last week held talks with the country’s major tech companies, including Tencent and ByteDance, about their H20 chip purchases and urged them to buy local alternatives.