Nvidia Halts H20 Chip Production for China Amid Trade Tensions

Nvidia has abruptly ceased production of its H20 AI chips for the Chinese market following directives from Beijing. Officials reportedly warned local firms against purchasing the U.S.-designed semiconductors, citing unresolved security concerns. The development exacerbates ongoing technology trade frictions between Washington and Beijing.

The H20 chips were originally developed as a export-compliant product under Trump-era regulations, which mandated 15% revenue sharing with the U.S. government. Initial Chinese demand proved robust as companies sought to compensate for domestic supply shortages. That enthusiasm waned after authorities raised alarms about potential backdoor vulnerabilities—claims Nvidia has vigorously denied.

Attention now turns to Nvidia's forthcoming Blackwell architecture chips, which the company hopes will satisfy both performance requirements and geopolitical compliance standards. Industry observers note the strategic timing of this pivot, coming just days before Nvidia's Q2 earnings disclosure.