- The Nvidia H20 chip has become guaranteed in a heated geopolitical confrontation
- Nvidia’s source of income may seriously disrupt the tightening of the Chinese market
- Chinese technology giants hesitate to abandon Nvidia equipment for lower alternatives
China’s recent decision to strengthen restrictions on NVIDIA H20 flea sales attracted attention not only due to the technology involved, but also because of the circumstances that triggered it.
The reports indicate that the comments formulated by the Secretary of Commerce of the United States Howard Lutnick in mid-July 2025 were considered both “insulting” and impetuous by the Chinese government.
In a television interview, Lutnick said that Washington’s strategy was to ensure that Chinese developers became “dependent” of the American technological battery.
“We do not sell them our best things, not our second best things, not even our third best,” said Lunick CNBC.
“You want to sell the Chinese enough for their developers to become dependent on the American technological pile, it is thought,” he added.
The Chinese considered this unnecessarily arrogant remark, and she now designs a decision that presents supported sales supported for Nvidia, a company that has long considered the country as a major market.
The H20 chip, developed specifically for China after export controls, restricted access to more advanced models, had become a key product for local AI companies.
The CEO of Nvidia, Jensen Huang, recently visited Beijing and underlined the company’s commitment to remain competitive in the region.
However, China representing at least 15% of Nvidia’s total income, any disturbance in H20’s orders represents a serious challenge.
Washington and Beijing had previously concluded a framework agreement earlier in 2025, allowing H20 sales to take over in China while Beijing has restored certain rare earth exports.
This agreement was interpreted as a step towards stabilization of relationships. However, at the end of July 2025, Chinese regulators such as the China Cyberspace Administration and the Ministry of Industry and Technology began to advise companies to stop new H20 orders.
These tips, supervised in response to Lutnick’s remarks, highlights the fragility of recent progress.
In addition to restrictions, Beijing has favored the use of domestic fleas, including those of Huawei.
However, doubts remain on their effectiveness, and Deepseek had to delay the launch of his new R2 model after training of difficulties with the Huawei Ascend processors.
Chinese technology giants like Alibaba, Baidu and Bytedance have also been reluctant to change completely, citing stronger performance of Nvidia equipment compared to local alternatives.
The episode illustrates how political declarations can quickly change the fortune of companies, especially when national security and technological leadership are at stake.
While Nvidia has challenged the security risk claims linked to its products, Beijing regulators seem determined to limit American manufacturing fleas.
The question of whether Chinese companies can evolve to fill the gap remain uncertain, but what is clear is that the words of Lunick accelerated a decoupling process which could take place much faster than the analysts of the industry at the start.
Via financial times
