NVIDIA’s H20 AI Chip Ban Was Reportedly Lifted to Counter Huawei’s Rising Influence in China and Beyond, Threatening U.S. Dominance

NVIDIA’s H20 restriction uplift had a much deeper purpose than relieving Team Green, as AI czar David Sacks says it was a move to counter competition from China.

AI Czar David Sacks Reveals that Huawei’s Growing AI Advancements Made the US Rethink Export Controls

NVIDIA’s CEO, Jensen Huang, recently disclosed that the company expects its H20 AI chip to be available for China once again following the easing of US export controls. Now, when you talk about why this move happened apart from the trade deal between China and the US, AI czar David Sacks has disclosed a pretty interesting reason, one which Jensen has been discussing for several months. In an interview to Bloomberg Business, Sacks revealed that one of the reasons for lifting the H20 AI chip ban was to counter the growing influence of Huawei in Chinese markets.

You just don’t want to hand Huawei the entire Chinese market when NVIDIA is capable of competing for a big slice of it with a less capable chip. Again, we are not selling our latest, greatest chips to China, but we can deprive Huawei of the market share in China, which can be used to scale up to compete with the U.S. globally.

Sacks previously mentioned that Huawei’s CloudMatrix rack-scale solution is capable of competing with NVIDIA and that Chinese alternatives are a growing threat to the US’s AI dominance. Interestingly, Sacks agreed to Huang’s narrative that if US chips aren’t being offered to the world, China would ultimately take over, and this does show that NVIDIA’s CEO’s opposition against the recent rounds of US export controls has worked out, since the Trump administration has adopted his narrative. The H20 AI chip ban getting lifted is just an example of how the U.S. sees an emerging threat from China’s AI progress.

Now that NVIDIA is expected to have access to China, domestic CSPs see more interest in American AI technology, despite Huawei’s efforts to expand its market share. Sacks also supports the idea of Gulf states getting access to America’s AI chips, claiming that if NVIDIA and others are deprived of the GCC market, China would ultimately take over, similar to the telecom sector. So, it’s clear that the Trump administration had to make a choice here, whether to let Chinese tech flow into global markets, or ease the export controls on NVIDIA.

It would be interesting to see how the markets evolve once NVIDIA resumes its business in China, since the firm is expected to introduce multi solutions for Beijing, in an attempt to regain lost market share.