Chinese authorities have reportedly instructed companies to avoid using Nvidia’s H20 artificial intelligence chips and similar products from Advanced Micro Devices (AMD) for government and national security purposes. The guidance comes shortly after Nvidia received approval to resume shipments of its H20 chips to China, according to Bloomberg.
The White House confirmed on Monday that both Nvidia and AMD have agreed to give 15% of their China revenues to the U.S. government. The agreement follows earlier export restrictions that required licenses for AI chip sales to China. Both Nvidia’s H20 and AMD’s MI380 were developed to comply with previous U.S. rules limiting high-performance AI chip exports over national security concerns.
While shipments are set to resume, the Chinese advisory could affect demand for these chips in key sectors. Over the weekend, a social media account linked to Chinese state media labeled the H20 chip as “unsafe.” U.S. President Donald Trump also called the H20 “obsolete” and said higher-end Blackwell chips would only be permitted for China with a 30% to 50% performance cut.
China remains a major market for AI chipmakers, with Nvidia CEO Jensen Huang estimating its AI sector could reach $50 billion within the next two to three years. However, the latest warning adds to the ongoing geopolitical and trade tensions impacting the global semiconductor industry.
