NVIDIA H20 GPUs officially banned in China, production halted indefinitely

After the US government granted licences to export AI GPUs to China, the nation has banned the NVIDIA H20 GPU, according to a recent report.

It was only last week we heard rumors that NVIDIA had sent notices to companies on its AI GPU production line to stop production of H20 AI GPUs headed for China. Those two companies were Arizona-based Amkor Technology and Samsung Electronics. The story of NVIDIA selling its highly sought-after AI chips to China has been nothing short of a fiasco, with NVIDIA initially set to lose a staggering $5.5 billion over trade restrictions on China.

However, the US government reversed its stance on NVIDIA's chip exports by opening up a license that the company and others like it can apply for. This license would grant NVIDIA the right to export the H20 to China, provided the company paid the US government 15% of the revenue from these sales. Now it doesn't seem any of that is going to happen, as China has now banned the sale of H20 GPUs across the nation, or at least that is what the recent report is claiming.

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Notably, the Cyberspace Administration of China raised security concerns about the H20 potentially having backdoors. That claim has been profusely refuted by NVIDIA, which said none of its GPUs have any security backdoors whatsoever.

Now, an investment note purportedly from investment bank Jefferies claims that China has completely banned the H20 GPU, preventing any Chinese firm from placing orders with NVIDIA. Notably, Jefferies cites the previously mentioned reports about NVIDIA informing production line companies to stop work on new H20 GPUs headed for China.

It isn't just the H20 that has been targeted, with Jefferies writing China has banned the sale of "H20 and other 'downgraded US AI chips' until further notice."

So, what happens now? Jefferies writes NVIDIA has suspended production of the H20 chip in Taiwan as well, and that all shipments headed to China will now be paused, along with general H20 production targeting China. The bank says that the pause will stay in place until "the US and China come to an agreement on trade."