China warns companies against using Nvidia and AMD chips, report says

Chinese authorities have advised companies to steer clear of Nvidia's H20 chips following the chipmaker's recent approval to resume shipments of its less advanced artificial intelligence products. According to Bloomberg, which cited unnamed sources, the directive specifically targets government and national security applications. This development arises after the White House confirmed that Nvidia and AMD have consented to allocate 15% of their revenues from China to the U.S. government. Both companies had previously indicated plans to resume shipments to China after the administration implemented new export licensing requirements earlier this year. The H20 chip from Nvidia and AMD's MI380 were designed to circumvent prior restrictions on AI chip exports to China, primarily driven by national security apprehensions. On Tuesday, the stock prices of both companies experienced volatility. During a press conference, former President Trump labeled Nvidia's H20 chip as "obsolete" and expressed reluctance to allow the higher-performance Blackwell chips into China without a significant reduction in performance—between 30% and 50%. The Chinese market is critical for AI chip manufacturers like Nvidia and AMD. Earlier this year, Nvidia's CEO Jensen Huang emphasized that losing access to China would represent "a tremendous loss" for the company, forecasting that the nation's AI sector could reach a staggering $50 billion in the next two to three years. Meanwhile, a social media account associated with Chinese state media recently questioned the safety of H20 chips, further complicating the landscape for these tech giants.