Donald Trump’s administration has decided to ban NVIDIA from selling its H20 AI chips to China, another step in the escalation of the technological standoff between the US and China. This restriction could cause the company billions in losses and call into question the feasibility of developing chips that were supposed to comply with the previously introduced American restrictions. informs Bloomberg.
The U.S. government notified NVIDIA of the need to obtain an export license to supply H20 to the Chinese market. The term of validity of such restrictions is currently undetermined. The ban is due to fears that the chip could be used in Chinese computers.
Shares of NVIDIA fell 6% after the news was announced, sparking a chain of price drops for other chip companies, including AMD. The company said about $5.5 billion in write-downs are expected this quarter due to accumulated inventory and contractual obligations. Despite the fact that H20 is a simplified version of the main product, the US authorities still decided to limit its export, fearing the possible use in the development of Chinese artificial intelligence technologies.
Analysts see this decision not only as another step in the trade war, but also as part of a long-term strategy to curb China’s technological growth. The emergence of domestic competitors such as DeepSeek and Huawei is raising concerns in Washington. Although China’s AI accelerators are currently lagging in performance, their rapid development is fueling global rivalry.
Thus, the H20 export ban demonstrates the U.S. intention to limit China’s access to high-tech solutions, including components for supercomputers and artificial intelligence systems, even at the cost of tightening controls on its own companies that have previously tried to operate within permitted regulations.
