A fresh report claims that China is urging local companies to avoid Nvidia’s H20 chips. The artificial intelligence chip was previously banned from being sold in the region as a result of U.S.-China trade tensions in April, but the ban was later reversed in July, as announced by CEO Jensen Huang, causing Nvidia stock to surge.

However, despite the unban, it seems China isn’t keen on utilizing the chips from the American tech giant, at least according to Bloomberg. It reports that China recommends against using H20 for government or security-related work; this comes shortly after reports of security concerns. Nvidia recently put out a statement to confirm its commitment to “no backdoors,” “kill switches,” or “spyware” on its GPUs to assure that there should be no worries.

China wants local firms to use domestic chips

The H20 unban reignited hopes that Nvidia would boost its sales in China – the company previously stopped including China in its revenue forecasts, given uncertainty in the region as a result of restrictions. Regardless, Nvidia data center is up 10x in two years, so there isn’t too much to complain about.

According to Reuters, Nvidia put out a statement to clarify that the H20 chip is “not a military product or for government infrastructure” and noted there is no shortage of China-made alternatives.

“China has ample supply of domestic chips to meet its needs. It won’t and never has relied on American chips for government operations, just like the U.S. government would not rely on chips from China”

Nvidia statement, via Reuters

Whether this move is an effort to direct focus towards the development of China-made AI chips or whether there is a real security concern remains to be clarified. It’s perhaps safer to say a bit of both. In any case, demand for domestically-made chips has been rising in the East, given the previous restrictions, so it looks like China no longer needs Nvidia’s help to realize its own AI potential.

About the Author

Jack Goodall

At PC Guide, Jack is mostly responsible for reporting on hardware deals. He also specializes in monitors, TVs, and headsets and can be found putting his findings together in a review or best-of guide.