China pushes back on Nvidia chip sales, undercutting Trump’s proposed export deal

China is quietly urging domestic companies to steer clear of Nvidia’s H20 processors, especially for government or security-related projects, throwing a wrench into US efforts to turn those sales into a revenue source for Washington.

Over recent weeks, Chinese authorities have sent private notices to firms questioning their reliance on US chips and promoting domestic alternatives.

The guidance comes just as Nvidia and AMD gained approval from the Trump administration to resume selling certain AI chips to China, under a rare arrangement that requires the companies to share 15% of related revenue with the US government.

While the directive stops short of an outright ban, Beijing has placed the H20 under the same kind of partial restrictions previously imposed on Tesla vehicles, Apple iPhones, and Micron chips, citing security concerns.

Officials have floated fears that Nvidia hardware could carry location-tracking or remote shutdown features, claims the company firmly denies. At the same time, China is accelerating efforts to boost its homegrown semiconductor industry, urging firms to shift away from Western technology in favour of local suppliers, such as Huawei, even though domestic capacity still falls short of market demand.

The campaign highlights a broader geopolitical irony: US officials defended the resumption of H20 exports by arguing that the chip was already widely available in China and technologically inferior to top US models.

Trump has called it ‘obsolete,’ framing the sales as a way to keep Chinese AI systems dependent on American-made, less advanced hardware.

Behind the scenes, officials have linked the deal to a broader trade arrangement involving Chinese rare-earth minerals, though Beijing has publicly denied any such quid pro quo.

For Nvidia, the H20 remains strategically important. Although less potent than its flagship Blackwell series, the chip’s high memory bandwidth makes it well-suited for AI inference, a crucial stage in which models interpret and respond to data.

Chinese tech giants like Alibaba and Tencent have sought the H20 to offset supply shortages from Huawei, which is struggling to produce enough advanced chips to meet domestic demand.

Analysts warn that losing access to the H20 could raise the cost of running AI models in China by up to six times.

Still, Beijing’s stance appears to be a balancing act. RAND researcher Lennart Heim notes that China uses regulatory pressure to channel demand toward Huawei without cutting off access to Nvidia products, ensuring that companies can still meet their needs while domestic capabilities mature.

However, the Chinese government’s selective pressure could deepen uncertainty for US chipmakers counting on China, the world’s largest semiconductor market, to offset lost sales elsewhere.

While Washington’s new export-for-revenue-sharing model is already unprecedented, Beijing’s countermeasures show that even approved sales may face political headwinds.

For Nvidia and AMD, the challenge is no longer just securing US permission, but also convincing China to buy.

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Trump’s potential Nvidia deal with China raises national security risks

The US President Donald Trump has shattered decades of US national security precedent by striking a deal with Nvidia and AMD that allows the sale of certain banned AI chips to China, but at a certain price.

In an arrangement without modern parallels, the companies will resume exports of their H20 processors to the Chinese market in exchange for giving the US government a 15% share of related revenues.

The move reopens a channel for sensitive technology sales and introduces a transactional element into what had long been treated as a matter of uncompromising national security.

For decades, Washington’s export controls on strategic technologies were blunt instruments: if a product was deemed too sensitive, no amount of corporate lobbying or lost revenue could override the ban.

Trump’s approach breaks from that tradition, effectively monetising access to restricted technologies. He has even floated the idea of allowing a weakened version of Nvidia’s cutting-edge Blackwell chip to be sold in China, a possibility that has set off alarm bells among national security hawks.

Republican and Democratic lawmakers have condemned the decision, warning it risks transforming US security policy into a ‘pay-for-play’ system.

Representative John Moolenaar, who chairs the House Select Committee on China, argued that export controls should remain a first line of defence against adversaries, not a bargaining chip. His Democratic counterpart, Raja Krishnamoorthi, cautioned that putting a dollar value on national security sends the wrong message to both allies and rivals.

The Trump administration has defended the arrangement by downplaying the risk. Commerce Secretary Howard Lutnick called the H20 Nvidia’s ‘fourth-best’ chip, noting that it is already widely used in China. The administration also framed the move to keep Chinese companies tied to US technology rather than turning to rival suppliers. Yet questions loom over the legality of the revenue-sharing scheme.

Trade experts have raised the possibility that it could be interpreted as an export tax, something the US Constitution prohibits, though details of the agreement remain opaque.

Beyond legal debates, the financial implications are significant. Analysts predict the levy could cut gross margins on China-bound chips by as much as 15 percentage points, trimming overall profitability for Nvidia and AMD.

In turn, this change of course could prompt other US companies selling strategic goods to China, from aerospace to advanced materials, to wonder if they too will face similar revenue-sharing requirements.

For some, it could be a costly burden; for others, it might be the only way to retain access to China’s lucrative market.

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Trump weighs scaled-down Nvidia chip sales to China

President Donald Trump has signalled that he may permit Nvidia to sell a toned-down version of its latest Blackwell AI chip to China, which could substantially shift US tech export policy.

The idea, still under discussion with Nvidia CEO Jensen Huang, would involve reducing the chip’s computing power by 30% to 50%, creating what Trump described as an ‘unenhanced’ model for the Chinese market. While framed as a compromise, critics warn that even these stripped-down chips could fuel Beijing’s AI ambitions.

The announcement follows an unprecedented agreement between the Trump administration, Nvidia, and AMD, under which the US government would collect 15% of revenue from certain AI chip sales to China.

Washington insiders have expressed unease, noting that, with enough scaled-down hardware, China could still build AI supercomputers capable of competing with or surpassing American capabilities.

Saif Khan, a former White House technology adviser, cautioned that the move could accelerate China’s path toward AI dominance, undoing years of strict export controls.

Currently, Nvidia’s most advanced chip approved for sale in China is the H20, built on older Hopper architecture. The H20 was specifically designed to comply with restrictions imposed under President Biden and entered the Chinese market in 2024.

Although shipments were halted earlier this year, the Trump administration recently granted clearance for exports to resume. Trump dismissed the H20 as ‘obsolete’ and claimed China had already mastered it, suggesting the new Blackwell variant would offer a fresh revenue stream while staying within national security boundaries.

Nvidia’s flagship US Blackwell chip, unveiled in March 2024, is up to 30 times faster than its predecessor, making it a significant leap in AI performance. Details about the proposed Chinese variant remain undisclosed, but Reuters previously reported it would come at a lower cost and reduced power.

The US Commerce Department has begun issuing licenses for the H20, with officials insisting these exports do not threaten national security.

For Nvidia and AMD, the deal represents a rare case of direct government revenue-sharing tied to foreign sales, reflecting Trump’s hands-on approach to corporate negotiations. His administration has previously pressured tech executives to prioritise domestic manufacturing and has intervened in leadership appointments.

Nvidia, for its part, has stated it will follow all US export rules, while AMD confirmed receiving approval to ship some AI processors to China without directly addressing the revenue-sharing clause.

Beijing’s reaction so far has been muted. China’s foreign ministry declined to comment on the potential Blackwell deal but has repeatedly accused Washington of using technology controls to ‘maliciously contain and suppress’ Chinese industry.

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Beijing 2025 Robot Conference highlights China’s humanoid robotics growth

The 2025 World Robot Conference in Beijing has drawn significant attention to China’s growing humanoid robotics industry. With over 60 humanoid robots on display, the event attracted investors and tech enthusiasts alike, generating a surge in stock prices for companies such as Unitree Robotics.

The conference showcased robots performing diverse activities from industrial operations to more human-like tasks, including marathons and kickboxing, highlighting rapid AI advancements.

China’s Ministry of Industry and Information Technology has supported the sector strongly, aiming for mass production and widespread adoption by 2027. The market, valued at $2.24 billion in 2024, is expected to grow to $41 billion by 2032, reflecting a compound annual growth rate of nearly 44%.

New manufacturing facilities and advances such as carbon fibre materials are boosting the durability and agility of these robots, while companies are focusing on AI integration and teamwork capabilities.

Despite the promising outlook, challenges like high costs, AI learning complexities, and potential overvaluation remain. Experts acknowledge China is closing the gap in humanoid robotics innovation, though technical hurdles persist.

The event underscores the significant role humanoid robots could play in reshaping industries and everyday life, supported by both state initiatives and private investment.

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Nvidia and AMD to pay 15% share of China AI chip revenue to secure US export licences

Nvidia and Advanced Micro Devices have agreed to hand 15% of their Chinese AI chip sales revenue to the US government in return for export licences.

The arrangement, covering Nvidia’s H20 accelerator and AMD’s MI308 model, is considered unusual and could prove contentious for both companies and Beijing.

The deal reflects Washington’s willingness to link trade concessions to financial payments, but analysts note there is little precedent for such a targeted export levy.

Critics warn the move could undermine the national security rationale for export controls, making it harder to convince allies to adopt similar measures. Beijing, meanwhile, has voiced security concerns over the H20 chip’s performance and alleged vulnerabilities.

Industry observers suggest the payment requirement could discourage further expansion by US chipmakers in China, the world’s largest semiconductor importer, and give local producers an advantage in building domestic capacity.

Chinese firms such as Huawei are already increasing market share amid tighter restrictions on US technology.

The potential sums involved are significant. Before restrictions were imposed, Nvidia had generated over $7 billion in H20 sales to China in a single quarter. In comparison, AMD could earn up to $5 billion annually if full access to the market resumed.

However, uncertainties over demand and regulatory conditions remain.

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NVIDIA pushes back against chip backdoor demands

NVIDIA has publicly rejected calls to embed kill switches or backdoors in its AI chips amid growing political pressure. The statement follows proposals from US lawmakers and accusations by Chinese authorities.

Chief Security Officer David Reber Jr. said any such backdoor would endanger global digital infrastructure and open doors for hackers. He reaffirmed NVIDIA’s commitment to fixing vulnerabilities, not creating them.

The controversy arises as the chipmaker navigates strict US export controls while maintaining its foothold in China with the H20 chip. A Chinese agency recently claimed these chips already contain hidden controls.

Reber distinguished transparent, user-controlled tools like remote wipe from covert backdoors, arguing they serve customers without risking the system integrity of the chips.

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China flags crypto iris scans as national security risk

China’s top security agency has raised concerns over crypto-related projects collecting biometric data, warning they may threaten national security. A recent MSS bulletin warned that crypto firms trading tokens for iris scans could misuse personal data.

While the agency didn’t explicitly mention Worldcoin, the description aligns with its practice of exchanging tokens for biometric scans in over 160 countries.

Officials described iris recognition as a sensitive form of identification that, once leaked, cannot be changed. The bulletin warned that fake facial data may be used by foreign agencies for espionage and infiltration.

In response to privacy concerns, Ethereum co-founder Vitalik Buterin recently proposed a pluralistic identity system. The concept combines multiple sources of verification rather than relying on a single, centralised ID.

He argued that current models risk eliminating anonymity and may favour wealthy participants in verification systems.

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China warns over biometric data risks linked to crypto schemes

China’s Ministry of State Security has warned of foreign attempts to collect sensitive biometric data via crypto schemes. The ministry warned that foreign agents are illegally harvesting iris scans and facial data, risking personal privacy and national security.

The advisory noted recent cases in which foreign intelligence services exploited biometric technologies to spy on individuals within China. Cryptocurrencies incentivised people worldwide to submit iris scans, which were sent overseas.

Although no specific companies were named, the description resembled the approach of the crypto firm World, formerly known as Worldcoin.

Biometric identification methods have proliferated across many sectors due to their accuracy and convenience. However, the ministry stressed the vulnerability of such systems to data breaches and misuse.

Iris patterns, unique and challenging to replicate, are prized by malicious actors.

Citizens are urged to remain cautious, carefully review privacy policies, and question how their biometric information is handled.

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Chinese nationals accused of bypassing US export controls on AI chips

Two Chinese nationals have been charged in the US with illegally exporting millions of dollars’ worth of advanced Nvidia AI chips to China, violating the export controls.

The Department of Justice (DOJ) said Chuan Geng and Shiwei Yang operated California-based ALX Solutions, which allegedly shipped restricted hardware without the required licences over the past three years.

The DOJ claims that the company exported Nvidia’s H100 and GeForce RTX 4090 graphics processing units to China via transit hubs in Singapore and Malaysia, concealing their ultimate destination.

Payments for the shipments allegedly came from firms in Hong Kong and mainland China, including a $1 million transfer in January 2024.

Court documents state that ALX falsely declared shipments to Singapore-based customers, but US export control officers could not confirm the deliveries.

One 2023 invoice for over $28 million reportedly misrepresented the buyer’s identity. Neither Geng nor Yang had sought export licences from the US Commerce Department.

Yang was arrested on Saturday, and Geng surrendered soon after. Both appeared in a Los Angeles federal court on Monday and could face up to 20 years in prison if convicted.

Nvidia and Super Micro, a supplier, said they comply with all export regulations and will cooperate with authorities.

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The US considers chip tracking to prevent smuggling to China

The US is exploring how to build better location-tracking into advanced chips, as part of an effort to prevent American semiconductors from ending up in China.

Michael Kratsios, a senior official behind Donald Trump’s AI strategy, confirmed that software or physical updates to chips are being considered to support traceability.

Instead of relying on external enforcement, Washington aims to work directly with the tech industry to improve monitoring of chip movements. The strategy forms part of a broader national plan to counter smuggling and maintain US dominance in cutting-edge technologies.

Beijing recently summoned Nvidia representatives to address concerns over American proposals linked to tracking features and perceived security risks in the company’s H20 chips.

Although US officials have not directly talked with Nvidia or AMD on the matter, Kratsios clarified that chip tracking is now a formal objective.

The move comes even as Trump’s team signals readiness to lift certain export restrictions to China in return for trade benefits, such as rare-earth magnet sales to the US.

Kratsios criticised China’s push to lead global AI regulation, saying countries should define their paths instead of following a centralised model. He argued that the US innovation-first approach offers a more attractive alternative.

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