Chinese authorities have reportedly pressed domestic tech firms to curb purchases of Nvidia’s H20 chip after US Commerce Secretary Howard Lutnick described the product in dismissive terms during a television appearance, according to a Thursday report. The H20 is a less-powerful GPU variant designed to comply with US export controls.
Remarks and reaction
During a July 15 interview on CNBC, Lutnick said of sales to China, “We don’t sell them our best stuff, not our second-best stuff, not even our third-best.” He also said, “You want to sell the Chinese enough that their developers get addicted to the American technology stack, that’s the thinking.”
According to the New York Post, which cited the Financial Times, senior Chinese officials viewed the comments as “insulting” and moved soon after to intensify a regulatory push discouraging the H20. Two sources with knowledge of the crackdown told the FT the remarks added momentum to efforts urging companies to favor domestic chips.
Agencies involved in the pressure campaign reportedly include the Cyberspace Administration of China, the National Development and Reform Commission and the Ministry of Industry and Information Technology. Some Chinese tech firms have pared back H20 orders following the guidance, the report said.
Industry context and company responses
Nvidia’s chips are considered among the most advanced for powering artificial intelligence models, making any shift in China’s purchasing stance closely watched by the industry. Shares of Nvidia were down less than 1% in early trading on Thursday.
Nvidia statement and licensing backdrop
“As both governments recognize, the H20 is not a military product or for government infrastructure,” an Nvidia spokesperson said. “China won’t rely on American chips for government operations, just like the U.S. government would not rely on chips from China. However, allowing U.S. chips for beneficial commercial business use is good for everyone.” The Commerce Department did not immediately return a request for comment.
The situation has unfolded amid ongoing US–China trade discussions that have shown some progress but have not yielded a comprehensive agreement. To obtain export licenses, Nvidia and AMD have agreed to pay the US government 15% of revenue from their chip sales in China, the report noted.
The H20 was created to comply with tightened US export rules on advanced semiconductors bound for China. Critics cited in the reporting contend that even allowing sales of the H20 could weigh on US competitiveness in the AI race.
