China Urges Local Firms Not To Use Nvidia H20 Chips In New Guidance

Notices Strongly Advise Against Using Processors For Govt-Related Work: Sources

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HONG KONG - China has urged local companies to avoid using Nvidia's H20 processors, particularly for government-related purposes, complicating the chipmaker's attempts to recoup billions in lost China revenue as well as the Trump administration's unprecedented push to turn those sales into a US government windfall.

Over the past few weeks, the Chinese authorities have sent notices to a range of firms discouraging use of the less-advanced semiconductors, people familiar with the matter said.

The guidance was particularly strong against the use of H20s for any government or national security-related work by state enterprises or private companies, the people said.

In addition to Nvidia, Beijing's overall push affects artificial intelligence (AI) accelerators from Advanced Micro Devices (AMD), one of the people said, though it is unclear whether any letters specifically mentioned AMD's MI308 chip.

Both companies recently secured Washington's approval to resume lower-end AI chip sales to China, on the controversial and legally questionable condition that they give the US government a 15 per cent cut of the related revenue.

Now, Nvidia and AMD face the challenge of their Chinese customers being under Beijing's pressure not to make those purchases.

Some of Beijing's letters to firms included a series of questions, said one of the people, such as why they buy Nvidia H20 chips over local alternatives, whether that is a necessary choice given domestic options, and whether they have found any security issues in the Nvidia hardware.

The notices coincide with state media reports that cast doubt on the security and reliability of H20 processors.