logo
Chinese worry Nvidia H20 chips are poisoned wine for AI industry

Chinese worry Nvidia H20 chips are poisoned wine for AI industry

AllAfrica19-07-2025
The relaxation of the United States' export controls for Nvidia's H20 chips won brief applause in China – while raising longer-term concerns about whether Chinese firms will over-rely on foreign artificial intelligence chips.
During a trip to China on July 15, Nvidia Chief Executive Jensen Huang said in a press conference that the company will resume H20 chip sales to China, now that the US government has indicated it will soon grant export licenses.
'I hope to get more advanced chips into China than the H20,' Huang said. 'Technology is always moving on. Today, Hopper's terrific, but some years from now, we will have more and more and better and better technology, and I think it's sensible that whatever we're allowed to sell in China will continue to get better and better over time as well,' he said.
He also took the opportunity to praise Huawei's achievements in making AI chips.
However, some Chinese commentators viewed the development as unfavorable for China's chip-making sector.
'This is not a simple lifting of the export restrictions, but a carefully designed measure for the United States to maintain its technological blockade against China,' a Guangdong-based columnist says in an article.
'The H20's FP16 computing power is only 15% of H100, while its NVLink bandwidth is reduced from 900GB/s to 400GB/s. The chip's transformer engine (TE) is completely deleted,' he says. 'Such a design ensures the chip's AI inference ability and reduces its AI training capability, perfectly implementing the United States' strategy of blocking high-end chips, but not mid-end ones, to China.'
'By limiting the key performance of H20, the US can maintain its blockade of high-end computing power while handing Chinese companies a glass of 'poisoned wine,'' he says.
In Chinese idiom, a person who 'drinks poisonous liquor to quench thirst' knows that it will kill him, in the long run, but he can't do anything to change the situation. Applied to Chinese technology companies, this means that the domestic chipmakers can benefit from foreign AI chips in the short term but will miss an opportunity to grow and establish an ecosystem.
An AI firm needs tens of thousands of Nvidia's high-end chips, such as A100 or H100, to train a large language model (LLM) like ChatGPT. Once an LLM is developed, the company can use slower graphics processing units for inference tasks.
In an article published by 36kr.com, a columnist using the pseudonym 'Silicon Rabbit' says that Nvidia's Huang made a subtle and cunning move to help the US curb China's chip sector.
'Imagine that someone sold you a Ferrari with a powerful V12 engine, but downgraded its gas pipe, gearbox and wheels. This car can run normally on straight roads, but it faces limitations when continuously speeding up or making sharp turns,' he says, attributing the metaphor to an unnamed senior software engineer who had participated in the Hopper architecture's performance optimization project.
He says that the computing power of a single H20 chip is far below that of the H100, while a reduced interconnect bandwidth means a significant reduction in AI training capability.
'AI training is similar to having tens of thousands of people work together, which requires fast information exchanges,' he says. 'A low interconnect bandwidth means that people communicate slowly, resulting in a low thinking efficiency.'
He says that the H20 chip cannot be used to train trillion-parameter LLMs.
'The H20 generously offers 96 gigabytes of the third-generation high bandwidth memory (HBM3) – higher than the H100's 80GB HBM3e. However, the H20's memory bandwidth is only 4.0 terabytes per second (TB/s), lower than the H100's 4.8 TB/s,' he says. 'It is like someone giving you a bigger table to read more books, but making it harder for you to take books from the shelves.'
The writer says the relaxation of the export rules for the H20 is aimed at permitting the US to control the pace of China's AI development precisely.
Reuters, citing sources familiar with the situation, reported that Chinese internet giants, including ByteDance and Tencent, are submitting applications for the H20 chip. ByteDance denied the report. Tencent did not respond to Reuters' request for comment.
On April 9, 2025, according to Nvidia, the US government informed the company that a license is required for exporting its H20 products into the Chinese market. The new curb was a part of Washington's countermeasures after China retaliated against the Trump administration's reciprocal tariffs.
In announcing results for the three months ended April 27, Nvidia said sales of H20 products were US$4.6 billion before the new export licensing requirements took effect. It said it could not ship an additional $2.5 billion of H20 revenue.
After US and Chinese officials held meetings in London on June 9, both sides agreed to de-escalate the trade war. Beijing decided to ease export controls on niche metals to the US. In return, the US would allow Chinese firms to use its chip-making software and export parts for China's C919 flight engines. And now, the US will enable Nvidia to ship the H20 chips to China.
A Guangdong-based columnist says Nvidia's H20 chips will enjoy an advantage in the Chinese market, although Huawei's Ascend 910B chips perform better in many aspects of AI training. He says Nvidia's CUDA platform is more advanced than Huawei's MindSpore framework, making customers reluctant to use non-Nvidia chips.
For example, he says that Alibaba prefers to use the H20 chips to migrate its existing AI system, while the Ascend 910B chips may target state-owned enterprises.
A Beijing-based writer expects Nvidia's CUDA platform to continue enjoying an 80% market share in China, as it would be expensive for companies to switch to new platforms.
On July 18, a spokesperson for the Chinese Ministry of Commerce said the US should abandon its 'zero-sum mentality' and further remove a series of trade restrictions targeting Chinese companies that the ministry considered unreasonable.
The spokesperson stated that in May, the US unveiled export control measures targeting Huawei's Ascend chips, tightened restrictions on Chinese chip products following unfounded accusations, and intervened in fair market competition with administrative measures. The spokesperson urged the US to work with China to correct erroneous practices through equal consultation.
Meanwhile, the Trump administration increased its efforts to prevent China from obtaining Nvidia's high-end chips. It urged Malaysia and Thailand to curb transhipments of Nvidia's AI chips to China.
On July 14, the Malaysian government announced that export, transshipment or transit of high-performance AI chips of US origin will require a trade permit. Companies must notify the government at least 30 days before shipping Nvidia's high-end chips elsewhere.
Read: US plans to tighten AI chip export rules for Malaysia, Thailand
Orange background

Try Our AI Features

Explore what Daily8 AI can do for you:

Comments

No comments yet...

Related Articles

Chinese AI firms play it smart amid US tech curbs
Chinese AI firms play it smart amid US tech curbs

RTHK

time29 minutes ago

  • RTHK

Chinese AI firms play it smart amid US tech curbs

Chinese AI firms play it smart amid US tech curbs Digital AI glasses are the focus at a Rokid booth at the World Artificial Intelligence Conference in Shanghai. Photo: AFP China's artificial intelligence companies have announced two new industry alliances, aiming to develop a domestic ecosystem to reduce dependence on foreign tech as they seek to cope with US export restrictions on advanced Nvidia chipsets. The announcements were timed to coincide with the three-day World Artificial Intelligence Conference in Shanghai ending on Monday and came on the same day that the Financial Times reported that the United States has paused curbs on tech exports to China to avoid disrupting trade talks with Beijing and support President Donald Trump's efforts to secure a meeting with President Xi Jinping this year. The conference also showcased a slew of new products, such as an AI computing system from Huawei that experts believe rivals Nvidia's most advanced offering, as well as consumer-friendly products such as several kinds of digital AI glasses. The "Model-Chip Ecosystem Innovation Alliance" brings together Chinese developers of large language models (LLMs) and AI chip manufacturers. "This is an innovative ecosystem that connects the complete technology chain from chips to models to infrastructure," said Zhao Lidong, CEO of Enflame, one of the participating chipmakers. Other manufacturers of graphics processing units (GPUs) in the alliance include Huawei, Biren, and Moore Threads, which have been hit by US sanctions that block them from purchasing advanced tech made with US know-how. The alliance was announced by StepFun, an LLM developer. A second alliance, the Shanghai General Chamber of Commerce AI Committee, aims to "promote the deep integration of AI technology and industrial transformation". Participants include SenseTime, also sanctioned by the US and which has pivoted from facial recognition technology to LLMs. Others are StepFun and another LLM developer, MiniMax, as well as chipmakers Metax and Iluvatar CoreX. One of the most talked about products at the conference was Huawei's CloudMatrix 384 which incorporates 384 of its latest 910C chips and outperforms Nvidia's GB200 NVL72 on some metrics, according to US research firm SemiAnalysis. Huawei's system design capabilities have meant that it has been able to use more chips and system-level innovations to compensate for weaker individual chip performance, SemiAnalysis said. At least six other Chinese computing firms showcased similar "clustering" chip technology. Metax demonstrated an AI supernode featuring 128 C550 chips designed to support large-scale liquid-cooled data centre requirements. Other events included Tencent's unveiling of its open-source Hunyuan3D World Model 1.0, which the company said enables users to generate interactive 3D environments through text or image prompts. Baidu announced what it said was next-generation "digital human" technology that helps businesses to create virtual livestreamers. It features "cloning technology" that can replicate a human's voice, tone and body language from just 10 minutes of sample footage. Alibaba was among those announcing AI glasses. Its Quark AI Glasses are powered by its Qwen AI model and are due to be released in China by the end of 2025. They will allow users to access the tech giant's map service for easy navigating and to use Alipay by scanning QR codes with voice commands. (Reuters)

CK Hutchison eyes inviting Chinese ‘major strategic investor' to Panama ports deal
CK Hutchison eyes inviting Chinese ‘major strategic investor' to Panama ports deal

HKFP

time2 hours ago

  • HKFP

CK Hutchison eyes inviting Chinese ‘major strategic investor' to Panama ports deal

Hong Kong conglomerate CK Hutchison said Monday it was eyeing inviting a Chinese 'major strategic investor' to join a US-led consortium negotiating the sale of its global ports business outside China, including operations at the Panama Canal. The firm said in March it was offloading the firms — including operations in the vital Central American waterway — to a group led by asset manager BlackRock for US$19 billion in cash. The sale was seen as a political victory for US President Donald Trump, who had vowed to 'take back' the Panama Canal from alleged Chinese control, prompting Beijing's ire. China's market regulator said in March it was reviewing the deal. '(CK Hutchison) remains in discussions with members of the consortium with a view to inviting (a) major strategic investor from (China) to join as a significant member of the consortium,' the group said in a stock exchange filing. The firm added that changes to the consortium's membership and deal structure will be needed for the deal 'to be capable of being approved by all relevant authorities'. CK Hutchison announced in March it was offloading its global ports business outside China — including operations in the vital Central American waterway — to a group led by asset manager BlackRock for $19 billion in cash. The sale was seen as a political victory for US President Donald Trump, who had vowed to 'take back' the Panama Canal from alleged Chinese control, drawing Beijing's ire. China's market regulator said in March it was reviewing the deal. CK Hutchison said Monday that the 'period for exclusive negotiations' mentioned in the March announcement had expired, but that discussions will continue. It did not name the major Chinese investor. China's biggest shipping company Cosco was set to join the consortium and was requesting veto rights or equivalent powers, Bloomberg News reported. Bloomberg Intelligence analyst Denise Wong told the outlet that 'ongoing negotiations and the reported inclusion of Cosco Shipping in the consortium have likely eased concerns over Chinese regulatory hurdles, strengthening investor confidence in the deal's viability'. CK Hutchison said it 'intends to allow such time as is required for such discussions to achieve' a workable arrangement. It said it had stated on several occasions that it 'will not proceed with any transaction that does not have the approval of all relevant authorities'. Its Hong Kong-listed shares climbed nearly one percent Monday, while Cosco rose 0.5 percent. The consortium's original structure was designed to pass control of CK Hutchison's two Panama ports to BlackRock's Global Infrastructure Partners unit, while the remaining ports will go to Italian billionaire Gianluigi Aponte's Terminal Investment Limited. AFP has contacted Cosco for comment. The Panama Ports Company, a CK Hutchison subsidiary, has managed the port of Cristobal on the canal's Atlantic side and Balboa on the Pacific side since 1997, via a concession from the Panama government.

CK Hutchison seeks mainland partner in ports deal
CK Hutchison seeks mainland partner in ports deal

RTHK

time3 hours ago

  • RTHK

CK Hutchison seeks mainland partner in ports deal

CK Hutchison seeks mainland partner in ports deal CK Hutchison says it is looking for a mainland partner to join a consortium bidding for its ports business. Photo: AFP CK Hutchison on Monday said it is seeking a mainland partner to join a consortium bidding for its ports business outside China. In a filing to the Hong Kong stock exchange, the Hong Kong-based conglomerate noted that the period for exclusive negotiations with the the consortium has expired, but it remains in discussions with members of the group "with a view to inviting (a) major strategic investor from the mainland to join as a significant member of the consortium." "Changes to the membership of the consortium and the structure of the transaction will be needed for the transaction to be capable of being approved by all relevant authorities," the firm said. "The Group intends to allow such time as is required for such discussions to achieve [that]." CK Hutchison reiterated that it will not proceed with any transaction without the approval of all relevant authorities.

DOWNLOAD THE APP

Get Started Now: Download the App

Ready to dive into a world of global content with local flavor? Download Daily8 app today from your preferred app store and start exploring.
app-storeplay-store