Bloomberg reported on August 12 that, according to sources familiar with the matter, Chinese authorities have issued notices to several companies, stressing that state-owned enterprises and private firms engaged in government or national security-related work must not use the H20 chip specifically tailored for the Chinese market.
Deutsche Welle also reported under the headline “Does China No Longer Need Specially Tailored High-End Chips?” that China’s Ministry of Industry and Information Technology (MIIT) recently summoned major internet firms, including Tencent and ByteDance, to question their purchases of the H20 chip and express concerns over information security risks. Sources noted, however, that the companies were not instructed to halt procurement of the chip.
Commenting on the possible motivations, DSET Deputy Director of the Economic Security Team Min-Yen Chiang told Deutsche Welle:
“First, Beijing still wants to avoid domestic firms becoming dependent on foreign chips, particularly given its concerns over information and economic security. Second, China seeks to ensure that domestic demand can sustain Huawei’s ongoing push to advance indigenous technologies.”
Chiang further explained that, based on publicly available information, MIIT has not imposed a blanket ban on the H20 but rather advised against its use. He added that while the government appears eager for private firms to refrain from adopting the chip for the above reasons, “it remains uncertain whether domestic alternatives are fully capable of replacing the H20 in terms of capacity or performance.”
Following the Biden administration’s 2023 restrictions on the export of advanced AI chips to China, NVIDIA developed the H20 chip exclusively for the Chinese market. In April 2025, the Trump administration ordered a ban on H20 sales to China, though the restrictions were lifted in July. Deutsche Welle noted that in recent years, as access to U.S.-made AI chips has tightened, Chinese-developed equivalents have made significant progress.
Addressing the perception that Beijing is no longer concerned about reliance on foreign technologies, Chiang emphasized the opposite: “The Chinese government remains deeply concerned about being choked at critical technological bottlenecks. It is precisely because of this concern that Beijing feels the need to foster indigenous chip development. By discouraging the use of the H20, the government hopes to generate sufficient domestic demand to secure orders and revenue for firms like Huawei, which in turn can be reinvested in advancing local AI chip innovation.”