US halts Nvidia H20 chip exports over fears of China's misuse in AI

Nvidia, a prominent player in AI chip development worldwide, said on Tuesday that the US government informed them on April 9 that exporting its H20 chips to China would now necessitate government permission. The company also stated that this restriction would be in effect indefinitely.

Although the H20 chip has relatively limited computing capabilities, it possesses characteristics that make it suitable for constructing high-performance computing systems. The RFA report pointed out that the US government allegedly based its decision on fears that the H20 chips could be utilised in or modified for Chinese supercomputers.

The H20 was the most sophisticated artificial intelligence chip allowed for legal export to China, which was already under US national security-related restrictions on high-end semiconductor sales. While its performance does not match Nvidia's latest Blackwell chip, it is equipped with high-bandwidth memory akin to that used in Blackwell, offering a performance enhancement for certain applications, RFA reported.

The H20 chip attracted attention after it was used by DeepSeek, a Chinese AI startup that debuted a cost-effective and competitive AI model trained with the chip in January.

Earlier this year, the tech media outlet, The Information reported that leading Chinese tech firms, including Alibaba, Tencent, and ByteDance, collectively ordered over USD16 billion worth of H20 chips in the first quarter, marking a rise of more than 40% from the prior quarter, as noted by the RFA report.

The US first imposed export controls on AI chips targeting China in October 2022 and has since expanded the restrictions to encompass additional technologies and nations. The enforcement of the export limitation on H20 chips coincides with a rise in trade tensions between the US and China, according to the RFA.