"China has finally decided that dumbed-down Nvidia ships will undermine its ability to challenge the Americans for the lead in AI, which both nations believe is the future of technology. Nvidia faced a potential ban from the Trump administration, which threatened its chance to have Chinese customers earlier this year. Trump said in March he would block sales of its H20 chip, and then quickly reversed himself."
"China had an angry reaction when U.S. Commerce Secretary Howard Lutnick commented in June that the Nvidia chips sold in China were the fourth-best chips Nvidia made: "We don't sell them our best stuff, not our second best stuff, not even our third best. The fourth one down, we want to keep China using it. We want to keep having the Chinese use the American technology stack, because they still rely upon it.""
China's new regulations effectively bar Nvidia from returning to the Chinese AI market, removing what could have been its second-largest market. U.S. officials had previously sought to restrict the most powerful Nvidia chips from Chinese buyers, and the Trump administration threatened bans and conditions on sales. A U.S. Commerce Department remark that chips sold in China were the 'fourth-best' provoked Chinese anger. China responded by accelerating domestic chip development to match Nvidia's top products. Major Chinese firms, including Huawei, publicly claimed the ability to rival Nvidia's flagship chips, signaling intensified competition and supply-chain decoupling in AI semiconductors.
Read at 24/7 Wall St.
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