Trump Criticizes Nvidia's H20 as Obsolescent, Raising Concerns Over Selling the GPU to China
In the realm of advanced AI technology, Nvidia's H20 GPU has become a contentious issue in the ongoing US-China strategic competition. Despite former President Trump's characterisation of the H20 as obsolete, the GPU continues to hold significant value, particularly in the Chinese market.
The concern over the sale of the H20 to China is rooted in national security and competitive advantages. Chinese firms, despite official discouragement due to geopolitical considerations, continue to express a strong demand for Nvidia's GPUs. This is because, contrary to Trump's claims, the H20 remains a highly capable GPU, retaining significant market demand in China.
The H20 was designed with US restrictions to prevent the most powerful AI tech from reaching US adversaries. Yet, it still performs well compared to domestic Chinese chips, making it an attractive option for Chinese AI firms. Chinese authorities have barred the use of the H20 chip in sensitive government and national security sectors, reflecting Beijing's security concerns about relying on foreign technology with potential US ties.
From Nvidia's perspective, China accounted for a significant portion of H20 sales, around 15% of total revenue before export controls. Nvidia negotiated with the US government to resume limited sales of a "toned down" version of the GPU in China, agreeing to give the US government a 15% cut of revenue as part of the export license deal.
The advanced technical capability and desirability of the H20 in China, coupled with the economic stakes for Nvidia and the US government, have turned the H20 into a focal point of geopolitical tension. The situation is further complicated by the Chinese government's efforts to limit the use of Nvidia chips in sensitive sectors while Chinese firms still seek them for AI development.
Meanwhile, Nvidia's Blackwell GPUs, known for their impressive processing power, have also attracted attention. Some members of the US Congress have sought to make it mandatory for certain chips to contain kill switches, a move that Nvidia has publicly opposed, stating that their GPUs do not and should not have kill switches and backdoors.
The constitutionality of the 15% cut for H20 sales to China has been questioned, with some referring to it as a "reverse tariff". Some elected officials and analysts are concerned about the sale of the H20 chip to China due to its demand and potential use in advanced AI models.
Trump's administration is considering similar approaches for other companies and products, raising questions about the future of tech exports between the US and China. The Chinese embassy in Washington has not responded to requests for comment regarding these concerns.
In a news conference, Trump praised the Blackwell platform, but expressed concerns about exporting the Blackwell GPUs to China without modifications. Some Republicans, including Representative John Moolenaar, have opposed the resumption of H20 exports to China, stating that when it is diverted to China's People's Liberation Army supercomputer, it will substantially upgrade their ability to run advanced AI models.
Chinese officials have expressed concerns about Nvidia's chips, including the H20, and have asked companies within China not to use them over fears of potential compromises and vulnerabilities. Trump has suggested that he might consider allowing the sale of the Blackwell GPUs to China if they are modified in a negative way.
As the geopolitical landscape continues to evolve, the H20 GPU remains a significant point of contention, underscoring the complex interplay of technology, economics, and national security in the US-China relationship.
- Despite President Trump's opinion that the H20 GPU is obsolete, it continues to hold significant value, particularly in the Chinese market, given its advanced technical capability.
- The Chinese government has barred the use of the H20 chip in sensitive government and national security sectors out of concerns about relying on foreign technology with potential US ties.
- From Nvidia's perspective, China accounted for a significant portion of H20 sales, around 15% of total revenue before export controls, but they have negotiated to resume limited sales of a "toned down" version of the GPU in China, agreeing to give the US government a 15% cut of revenue.
- Chinese officials have expressed concerns about Nvidia's chips, including the H20, and have asked companies within China not to use them over fears of potential compromises and vulnerabilities.
- In the world of news and general-news, the H20 GPU is a focal point of geopolitical tension between the US and China, and its future sales are complicated by political concerns and security considerations in both countries.
