Beijing — US chipmaker Nvidia is once again at the heart of geopolitical rivalry as Washington imposes stricter export restrictions on its advanced artificial intelligence (AI) chips, further straining relations with Beijing.
On Thursday, Nvidia CEO Jensen Huang visited Beijing to meet senior Chinese officials, a symbolic trip that came right after the US Department of Commerce enforced new curbs requiring licenses to export the H20 AI chip to China. This measure, according to Washington, is aimed at preserving national and economic security amid growing concerns over military applications of AI technology.
Nvidia, which briefly overtook Apple as the world’s most valuable company in 2024, has been instrumental in the AI revolution. Its chips, central to running generative AI systems like ChatGPT, are now seen as strategic assets. With demand booming, China’s top tech firms—Tencent, Alibaba, and ByteDance—have placed large orders for Nvidia’s H20 chips.
These chips were originally developed to comply with existing US export restrictions from 2022. However, recent developments, such as the emergence of Chinese AI company DeepSeek, have reignited US concerns. DeepSeek claims it can run advanced AI applications even with lower-end chips, pushing Washington to act quickly to close potential gaps.
The latest ban came with no transition period, putting Nvidia in a difficult position. The company now expects to lose approximately $5.5 billion in unfulfilled orders, primarily from Chinese clients.
Analysts suggest that while these sanctions may pose challenges, they are unlikely to completely derail China’s ambitions. According to Chim Lee from the Economist Intelligence Unit, domestic chipmakers like Huawei are already pushing to fill the void, and the restrictions may accelerate homegrown innovation.
“Nvidia’s AI chip ban may slow China temporarily, but it will also fuel efforts to reduce reliance on US technology,” Lee explained.
The situation exemplifies how control over strategic tech like AI chips is no longer just a business matter—but a battleground for geopolitical influence and economic dominance in the 21st century.
