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Title: China reportedly discouraged purchase of NVIDIA AI chips due to
'insulting' Lutnick statements

Date: Thu, 21 Aug 2025 12:30:55 +0000
Link: https://www.engadget.com/ai/china-reportedly-...

Chinese regulators reportedly dissuaded local companies from purchasing
NVIDIA's H20 chips, because they found certain statements by US commerce
secretary Howard Lutnick "insulting." According to the Financial Times, the
Cyberspace Administration of China (CAC), the National Development and Reform
Commission (NDRC) and the Ministry of Industry and Information Technology
(MIIT) teamed up to intensify their efforts to push the use of homegrown
chips following Lutnick's remarks in an interview with CNBC.

The US, if you'll recall, blocked NVIDIA from selling its H20 chips to China
back in April out of concern that the Chinese military would use them to
develop AI technology. When the US government reversed its decision in July
and allowed the company to start shipping its chips to China, Lutnick told
CNBC: "We don't sell them our best stuff, not our second best stuff, not even
our third best. The fourth one down, we want to keep China using it... The
idea is the Chinese are more than capable of building their own. You want to
keep one step ahead of what they can build, so they keep buying our chips.
You want to sell the Chinese enough that their developers get addicted to the
American technology stack. That's the thinking." To note, a previous Times
report stated that the government allowed NVIDIA to ship its products to
China again after agreeing to hand over 15 percent of its profits.

As a response to Lutnick's remarks, the Times says Chinese authorities sought
ways to prevent local companies from buying H20 chips. CAC issued an informal
notice instructing China's biggest tech firms, such as ByteDance and Alibaba,
to stop new orders for H20 chips until the government is done conducting a
national security review. The companies are compelled to comply, because they
could face substantial fines from the CAC if they don't. Meanwhile, NDRC also
issued an informal notice, asking local tech companies not to purchase any
NVIDIA chip.

Reuters recently reported that NVIDIA is developing a new chip for the
Chinese market that's more powerful than the H20, perhaps driven in part by
China's move to discourage its purchase. It will be based on the company's
Blackwell architecture, but will only be capable of half the computing power
of NVIDIA's Blackwell Ultra GPUs. Their regulatory and export approval aren't
guaranteed, but the president previously implied that he was aware of the
project and said he expects NVIDIA CEO Jensen Huang to talk to him about it.

This article originally appeared on Engadget at
https://www.engadget.com/ai/china-reportedly-...
ai-chips-due-to-insulting-lutnick-statements-123055120.html?src=rss

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