China Having Second Thoughts On Trump's Nvidia Chip Deal

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At that time, some pundits in China described the H20 chips as an irresistible“poison wine” that would slowly kill Chinese AI chip makers by taking away their customers. Some others criticised the US for“dumping” the H20 to China.

Reuters reported on July 29 that Nvidia had placed orders for 300,000 H20 chipsets (worth about US$3.6 billion) with the Taiwan Semiconductor Manufacturing Company (TSMC) a week earlier.

On July 31, the CAC said it summoned US tech giant Nvidia over security risks related to its H20. It said some US lawmakers have called for advanced chips exported abroad to be equipped with 'tracking and positioning' functions.

“The US did not unconditionally relax its export controls for the H20 chips,” a writer with Mydrivers says in an article published on July 23.“It still does not allow the export of the high-end Blackwell chips. It seems to be saying that, 'I give you a sweet, but this is the last one.'”

The writer says that the Trump administration has not yet altered its strategy to counter China, but has instead employed an alternative approach. He says the US side must demonstrate sincerity if it wants to maintain dialogue with China, obtain Chinese rare earths, and push forward with Trump's visit to Beijing in September.

In an article, a Beijing-based financial columnist says that the US does not want to miss the opportunity to capitalize on the massive demand for AI chips in the country.

“The US government's lifting of the ban on the H20 isn't unconditional goodwill,” he says.“Lutnick has explicitly stated that the US policy goal is to get Chinese developers addicted to American technology.”

He says Lutnick's comments bluntly revealed the United States' intention to profit from China, while controlling its technological development. He says Nvidia will reportedly sell the B20, B30, and B40 chips to China in September, fueling the already-drastic competition between Nvidia and Huawei Technologies in China.

“In Huawei's labs, engineers are now testing the performance of Ascend 910B chip clusters,” he says.“This chip can reach 320 TFLOPs (trillion floating-point operations per second) using FT16 (16-bit floating-point numbers) in speed to match the H20, while its price is 40% lower.”

He says China will have more bargaining power in the global chip sector once its chips account for half of the Chinese AI computing market.

15% revenue-sharing

In a press briefing on Monday, United States President Donald Trump explained why he agreed to restart the export of the H20 chips to China.

He said that he had asked Nvidia for a 20% cut of the company's H20 chip sales to China, but ultimately, he agreed on only 15%. He stressed that the money will go to the US government, not himself. The same charge will also be applied to AMD, which sells MI308 to China.

Trump also said he would discuss with Nvidia's Huang if Nvidia could reduce the performance of its Blackwell system by 30 to 50% for the Chinese market.

“That would be an unenhanced version of the big one [the most advanced Blackwell chips,” he said in a press briefing.“We still sometimes sell fighter jets to a country, and we'll give them 20% less than we have.”

In a February article , an IT columnist named Uncle Biao writes that Huawei planned to sell 100,000 Ascend 910C chips and 300,000 910B chips in 2025.