Nvidia’s most advanced H20 AI chip is the company’s most advanced model to date. It has to tread a fine line of an ever-growing quota of export restrictions—especially when it comes to sales to China. After massive debate, the Biden administration has agreed to maintain tough AI chip export restrictions. As with the previous administration, this decision has grave implications on the H20 chip. Nvidia CEO Jensen Huang has been clear about his intentions to build new AI data centers in the U.S. His commitment is said to have saved the H20 from immediate export restrictions.
The H20 chip is in fact very specifically down clocked to show up less powerful than other available Nvidias. Yet it has quickly taken root as an insidious but influential norm in AI development. Notably, China-based DeepSeek makes this Open-mix used to train its R1 open AI model. China’s export restrictions on H20, especially against TSMC, have raised significant alarm within the semiconductor industry. Most stakeholders are understandably scared of what these sorts of restrictions will do to their operations and competitiveness.
In fact, prior to this latest policy announcement, the Trump administration had first committed to enforcing export controls. These controls were specifically meant to target the H20 chip. This plan was met with a turnaround, potentially affected as well by Huang’s better-received suggestion to boost Nvidia’s bet on US-based AI infrastructure. The administration’s decision to maintain existing export rules, introduced by President Biden in January, affects H20 directly and complicates Nvidia’s international business model.
H20 remains prohibited only to be exported to the same countries. For China and Russia, it’s under much stricter regulations. These new guidelines extend chip export restrictions to almost every country outside the U.S. This would be a notable departure from the government’s typical trade policy, something described as “unprecedented and misguided” by Nvidia. The company lays out that these kinds of restrictions could limit global innovation and stop global technological advancement.
The still broiling controversy over H2O’s export status makes for a perfect conundrum when it comes to Nvidia. These issues permeate the entire semiconductor industry. The chip is the key to building new AI models, including those being developed by our competitors around the world. Huang is an enthusiastic proponent of significant investment in U.S. data centers. This ambitious but strategic step hopes to reduce the impact of existing controls and promote growth at home.
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