[Source/Observer Network Qi Qian] Because of selling "downgraded special edition" chips to China, NVIDIA has been under close watch by the Trump administration.

On May 9th, three informed sources told Reuters that due to threats from the U.S. to halt exports, NVIDIA plans to further downgrade the configuration of the H20 chip series for the Chinese market in the next two months. Two of them said that NVIDIA has notified its main Chinese clients about releasing a downgraded version of the H20 in July.

The report stated that NVIDIA has set new technical thresholds for the "special edition" chips for China.

One source said this would lead to a significant drop in performance compared to the original H20, including a substantial reduction in memory capacity. Another source mentioned that downstream customers might adjust the chip's performance level by modifying module configurations.

NVIDIA chip schematic diagram - U.S. media

As early as October 2022, the U.S. government had already implemented a series of chip export restriction measures, which were subsequently tightened to prevent NVIDIA, AMD, Intel, and other American semiconductor giants from selling their most advanced chips in China, forcing these companies to seek alternative solutions. Previously, NVIDIA developed custom H20 chips for the Chinese market to comply with U.S. export regulations, and orders began to be accepted in February last year.

Reuters previously reported that as an "AI chip special edition for China," the H20 is not as fast as other NVIDIA chips in training AI models but is competitive in inference processes.

Data shows that in the fiscal year ending on January 26th, the Chinese market brought NVIDIA $17 billion in revenue, accounting for 13% of its total sales. Reuters cited sources saying that since January, NVIDIA has accumulated $18 billion in orders for H20 chips.

However, The Wall Street Journal reported in April citing an informed source that NVIDIA has been strongly resisting the new U.S. control measures in private and assessed that China actually has the capability to produce chips at the same level as the H20. The report suggested that China will continue to promote breakthroughs in its indigenous chip industry,摆脱对美国 technology dependence, and vigorously promote the popularization of domestic alternatives.

Since taking office in January, the Trump administration has promised to continue cracking down on AI chip exports to China by American companies.

In the report, Reuters mentioned that American analysis company SemiAnalysis said that Americans believe the rise of China's DeepSeek poses a strong challenge to the U.S., making it more urgent to tighten chip exports to China. The New York Times also published an article stating that after DeepSeek emerged, China's success in the AI field made America feel even more uneasy.

On April 15th, the U.S. halted the export of NVIDIA's "special edition" H20 chips for China, AMD's MI308 chips, and similar AI chips under the pretext of "complying with national and economic security interests." Subsequently, there were reports that NVIDIA was reworking custom chips for China.

Recently, a U.S. congressman said he plans to propose a bill within the next few weeks requiring location systems to be embedded in NVIDIA chips. It was reported that the move to monitor chip locations received support from both parties in Congress, targeting China and aiming to address what they claim are NVIDIA chips' "massive exports to China violating U.S. export control laws."

NVIDIA CEO Jensen Huang has consistently opposed restrictions on exports to China. In March, when asked about export controls, Huang pointed out that about half of AI researchers worldwide are from China, many of whom work in U.S. laboratories.

During his visit to China in April, Huang emphasized that NVIDIA will continue to optimize its product lineup to meet regulatory requirements and remain steadfastly committed to serving the Chinese market. On April 30th, Huang reiterated his hope that the Trump administration would change its chip export rules, stating that "the world has fundamentally changed," and China is "not behind" in the field of artificial intelligence.

On April 17th, NVIDIA CEO Jensen Huang arrived in Beijing - Yuyuan Tan Tian

American consumer news and business channel CNBC reminded that the strategic impact of the U.S. halting NVIDIA's "special edition" chips for China far outweighs the financial impact. NVIDIA dominates the AI system semiconductor market, and selling chips to China is crucial for its future. NVIDIA believes that if it exits the Chinese market, its chip sales business will be handed over to Huawei, an AI chip manufacturer, and Huawei will begin challenging its global sales share.

Patrick Moorhead, an analyst at technology consulting firm Moor Insights & Strategy, said: "This cuts off NVIDIA's access to a key market; they will lose momentum in China. Ultimately, Chinese enterprises will turn to Huawei."

The Foreign Ministry spokesperson previously responded by pointing out that China has repeatedly expressed its firm stance on the U.S. malicious blockade and suppression of China's semiconductor industry. The U.S. has politicized, generalized, and toolized economic and technological issues, continuously tightening restrictions on chip exports to China, and coerced other countries to suppress China's semiconductor industry. This behavior hinders the development of the global semiconductor industry and will ultimately backfire, harming both others and itself.

This article is an exclusive contribution from Observer Network and cannot be reprinted without permission.

Original source: https://www.toutiao.com/article/7502394495431082508/

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