Nvidia, the world’s most valuable company, is navigating an increasingly tenuous relationship with China as it seeks to sell its artificial intelligence (AI) chips. The company’s graphics processing units (GPUs) are considered the backbone of the AI boom and have seen a meteoric rise over the past few years. However, as the U.S. and China compete for control, its chips have become a key target, creating a complex balancing act for the firm.
Nvidia’s chips have become highly sought after, as companies and countries alike race to develop AI. This has made the chips a key chokepoint, as the U.S. seeks to limit China’s abilities to develop the technology. The Biden administration initially limited some advanced chip sales to China in October 2022, prompting Nvidia to develop separate chips with slower processing speeds for sale on the Chinese market. In response, the A800 and H800, alternatives to its A100 and H100 chips, were soon targeted in another round of export controls in October 2023. In response, Nvidia developed a new option for China, the H20 chip.
The Trump administration initially cracked down on H20 sales to China in April, as tensions spiked between Washington and Beijing over the president’s expansive tariff regime. However, shortly after a visit by Huang to the White House in July, the chipmaker said it had received assurances from the U.S. government that its H20 licenses would be approved.
Despite these concerns, Nvidia remains in a fairly strong position with both the U.S. and China, standing in sharp contrast to Intel, which has come under fire over CEO Lip-Bu Tan’s reported ties to China.
