NVIDIA Pursues Advanced Chip Exports to China Amid H20 Production Halt

NVIDIA is negotiating with the US government to export a new, advanced chip to China, despite halting production of the H20 chip due to security concerns. The company is developing a new AI chip, B30A, with performance surpassing the H20. NVIDIA has assured China that their products do not have security vulnerabilities and has requested suppliers to halt production related to the H20 graphics processor.

NVIDIA (NVDA) is in talks with the U.S. government to export a new, advanced chip to China, despite halting production of the H20 chip due to security concerns. The company is developing a new AI chip, the B30A, which is said to outperform the H20. NVIDIA has assured China that their products do not have security vulnerabilities and has requested suppliers to halt production related to the H20 graphics processor [1].

The halt in production of the H20 chip, which is specifically designed for the Chinese market, comes as Chinese officials have expressed concerns over potential security risks. NVIDIA has been instructed by Chinese authorities to suspend the production of the H20 chip, with suppliers like Samsung Electronics and Amkor Technology complying with the directive [2]. NVIDIA CEO Jensen Huang is currently discussing the issue with Chinese officials, and the company is reportedly working on the B30A chip, which is expected to be more advanced than the H20 [3].

NVIDIA's stock price has been affected by the developments, with shares falling 1% in premarket trading following the announcement of the H20 chip halt [1]. The company is expected to report its fiscal Q2 earnings on August 27, and analysts have warned that ongoing uncertainty in China could weigh on the company's next quarter outlook [4]. Despite the challenges, NVIDIA's GPU supply grew 40% in the second quarter and is projected to rise another 20% in the third quarter with the rollout of the Blackwell B200 chips [4].

In a statement, NVIDIA emphasized that the H20 chip is not a military product and does not contain 'backdoors' that would allow remote access or control. The company has stated that the market can use the H20 chip with confidence [1]. Meanwhile, NVIDIA has also been exploring the possibility of offering the B30A chip to China, which could help the company maintain its presence in the Chinese market [3].

References:
[1] https://www.investopedia.com/nvidia-halts-china-chip-production-as-beijing-warns-over-security-reports-say-11795741
[2] https://www.aol.com/china-probes-nvidia-over-ai-064251542.html
[3] https://www.ainvest.com/news/nvidia-asks-suppliers-stop-h20-ai-chip-production-chinese-concerns-2508/
[4] https://www.benzinga.com/markets/tech/25/08/47274541/nvidia-suspends-china-focused-h20-chip-as-beijing-pushes-for-domestic-alternatives-analysts-warn-of-weaker-q3-outlook-report