China Restricts Nvidia AI Chip Sales After US Remarks

Following remarks by U.S. Commerce Secretary Howard Lutnick describing the U.S. policy of selling China downgraded AI chips as a strategy to keep Chinese developers reliant on American technology, Chinese regulators launched a campaign to restrict sales of Nvidia's China-specific H20 AI processor. Multiple Chinese agencies, including the Cyberspace Administration of China and the National Development and Reform Commission, pressured major tech firms like Alibaba and ByteDance to reduce or cancel orders for the Nvidia chip, favoring domestic alternatives from companies such as Huawei and Cambricon. This regulatory push represents a setback for Nvidia, which is already barred from selling its most advanced GPUs in China, and reflects heightened tensions between economic diplomacy and technological security concerns amid broader U.S.-China trade frictions. Nvidia has denied allegations from Chinese regulators about security risks in its chips, but the campaign underscores China's determination to advance chip independence. Meanwhile, U.S. officials, including Treasury Secretary Scott Bessent, expressed satisfaction with existing tariffs on China, expecting tariff revenues under President Trump to surpass prior estimates and contribute to reducing the federal debt. These developments illustrate the complex dynamics of the U.S.-China trade relationship, where trade policies and technological competition continue to intersect.