In a surprising move, the US has allowed Nvidia to resume sales of its key AI chip designed specifically for the Chinese market. The decision comes after months of tensions between Washington and Beijing over export controls. However, Beijing’s response has been lukewarm, with the government describing the chip as a security risk.
The move reflects China’s growing drive to build a self-sufficient semiconductor supply chain. Despite significant advances in its own chip technology, China still relies heavily on American chips and technology. Experts say that China’s national champion Huawei has developed AI chips with performance comparable to Nvidia’s H20, but the US remains the leader in this field.
The US decision may also be seen as a form of political posturing. Trump has justified his decision by saying the chip is “obsolete” and that he wants to maintain US tech leadership by ensuring its chips remain the global standard. However, Beijing believes the US is not playing fair and is trying to occupy China’s market.
The H20 chip remains highly sought after by Chinese companies, despite its reduced performance compared to Huawei’s top AI chips. The technology behind it, known as High Bandwidth Memory (HBM), is still lagging behind industry leaders like South Korea’s SK Hynix and Samsung.
China’s push for self-sufficiency in the semiconductor sector has accelerated due to export controls imposed by the US. Beijing has requested Washington to lift restrictions on HBM sales as part of trade deal negotiations.
Despite this, experts say that China’s rapid progress in semiconductor technology should not be underestimated. The country is expected to surge its production of homemade AI chips from 17% in 2023 to 55% by 2027.
Source: https://edition.cnn.com/2025/08/17/tech/nvidia-china-beijing-trump-ai-intl-hnk