Nvidia, the world’s leading AI chipmaker, is once again caught in the middle of rising tensions between the US and China over technology and trade. Recently, the US imposed stricter export controls, requiring Nvidia to get special licenses before selling its H20 AI chips to China. The move aims to limit China’s progress in advanced AI, especially in military applications.
But why is Nvidia so crucial in this battle?
Nvidia’s high-performance chips power generative AI systems like ChatGPT, making them essential for AI development. With global demand soaring, Nvidia briefly became the world’s most valuable company last year. However, US restrictions have forced Nvidia to create modified chips like the H20 to comply with earlier rules. Now, even those chips face bans, leaving Chinese tech giants like Tencent, Alibaba, and ByteDance scrambling for alternatives.
China isn’t standing still—companies like Huawei are developing their own AI chips. While they may not yet match Nvidia’s power, US restrictions could push China to accelerate its chip industry. Experts say this won’t stop China’s AI growth but may slow it temporarily.
Meanwhile, Nvidia’s CEO, Jensen Huang, rushed to Beijing to reassure Chinese officials and businesses. He met top leaders and AI firms like DeepSeek, signaling Nvidia’s commitment to China—a market that makes up 13% of its sales.
The bigger picture? The US wants to cut reliance on China for advanced tech, pushing companies like Nvidia and TSMC (which makes Nvidia’s chips) to invest billions in American manufacturing. This tech war is splitting the global industry into two camps—one led by the US, the other by China—meaning more restrictions and less global cooperation in the future.
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