- Nvidia’s H20 chip became collateral in a heated geopolitical clash
- Nvidia’s income flow runs the risk of serious interruptions with the hardening of the Chinese market
- Chinese technological giants hesitate to abandon Nvidia hardware for weaker alternatives
China’s recent decision to adjust the restrictions in NVIDIA H20 Chips sales has called attention not only for the technology involved, but also because of the circumstances that triggered it.
The reports indicate that the comments made by the Secretary of Commerce of the U. Howard Lutnick in mid -July 2025 were seen as “insulting” and witnessed by the Chinese government.
In a televised interview, Lutnick declared that Washington’s strategy was to ensure that Chinese developers became “addicted” to the American technology battery.
“We do not sell our best things, not our second better things, not even our best thirds,” Lutnick said CNBC.
“You want to sell to the Chinese enough for their developers to become addicted to the American technology battery, that is thought,” he added.
The Chinese considered this comment unnecessarily arrogant, and now it is a movement that presents sustained winds against Nvidia, a company that has seen the country as an important market.
The H20 chip, specifically developed 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, visited Beijing recently and emphasized the company’s commitment to stay competitive in the region.
Even so, with China that represents at least 15% of NVIDIA’s total income, any interruption of H20 orders represents a serious challenge.
Washington and Beijing had previously reached a framework agreement at the beginning of 2025 allowing H20 sales to resume in China, while Beijing restored some rare earth exports.
That agreement was interpreted as a step towards stabilization of relationships. However, at the end of July 2025, Chinese regulators such as the administration of the cyberspace of China and the Ministry of Industry and Technology began advising companies that stopped new H20 requests.
This guide, framed in response to Lutnick’s comments, highlights the fragility of recent progress.
Together with the restrictions, Beijing has promoted the use of domestic chips, including those of Huawei.
However, there are doubts about its effectiveness, and Depseek had to delay the launch of its new R2 model after training difficulties with Huawei Ascend processors.
Chinese technology giants such as Alibaba, Baidu and Bytedance have also been reluctant to change completely, citing a stronger Nvidia hardware performance compared to local alternatives.
The episode illustrates how political statements can quickly alter corporate fortune, especially when national security and technology leadership are at stake.
Although Nvidia has played claims for security risks linked to their products, Beijing regulators seem determined to limit the dependence on chips made by the United States.
If Chinese companies can climb to fill the void is still uncertain, but what is clear is that Lutnick’s words have accelerated a decoupling process that can develop much faster than industry analysts initially expected.
Via Financial Times
