Catenaa, Tuesday, August 12, 2025- China has urged local companies to avoid using Nvidia’s H20 processors, particularly for government-related purposes, complicating the chipmaker’s return to China.
Quoting sources, Bloomberg said that over the past few weeks, Chinese authorities have sent notices to a range of firms discouraging the use of the less-advanced semiconductors.
The guidance was particularly strong against the use of H20s for any government or national security-related work by state enterprises or private companies, said the people, who asked not to be identified because the information is sensitive.
The letters didn’t, however, constitute an outright ban on H20 use, according to the people.
Industry analysts broadly agree that Chinese companies still covet those chips, which perform quite well in certain crucial AI applications.
Donald Trump said Monday that the processor “still has a market” in the Asian country despite also calling it “obsolete.”
Nvidia and Advanced Micro Devices(AMD) both recently secured Washington’s approval to resume lower-end AI chip sales to China, on the controversial and legally questionable condition that they give the US government a 15% cut of the related revenue.
But even with Trump’s team on board, the two companies face the challenge that their Chinese customers are under Beijing’s pressure to purchase domestic chips instead.
Beijing’s overall push affects AI accelerators from AMD in addition to Nvidia, one of the people said, though it’s unclear whether any letters specifically mentioned AMD’s MI308 chip.
Beijing’s stance could limit Trump’s ability to turn his export control about-face into a windfall for government coffers, a deal that highlighted his administration’s transactional approach to national security policies long treated as nonnegotiable.
Shares of Nvidia were barely up by Tuesday afternoon by 0.2% while AMD shares were up by close to 1%.
