Beijing's Bold Move: Tech Tensions Over Nvidia's H200 Chips

Beijing has directed Chinese tech firms to pause purchasing Nvidia's H200 chips, potentially mandating domestic AI chip acquisitions. Amid U.S.-China tensions over technology, Nvidia is caught between tightening U.S. export controls and China's push for technological independence. The directive reflects strategic maneuvers in the burgeoning semiconductor sector.

Beijing has issued a directive to Chinese technology companies, instructing them to halt orders of Nvidia's H200 chips, according to a report by The Information on Wednesday. This comes as the Chinese government considers conditions under which access to these high-performance chips might be granted.

Nvidia finds itself at the center of escalating tensions between Washington and Beijing, with the U.S. imposing tighter controls on the export of advanced semiconductors vital to AI development. Meanwhile, Chinese firms are moving to decrease their dependency on American-designed chips, highlighting the strategic role semiconductors now play in U.S.-China relations.

Nvidia CEO, Jensen Huang, expressed optimism at the Consumer Electronics Show, stating that demand for the H200 chip in China remains high. The U.S. previously approved sales of these chips to China with a unique 25% revenue-sharing tax condition, marking a significant development in the ongoing technology trade landscape.

(With inputs from agencies.)