NextFin news, China declared on August 21, 2025, that it will boycott Nvidia's AI chips after US Trade Minister Howard Lutnick made comments on American television that were seen as insulting by Chinese officials. The announcement came amid ongoing tensions between China and the United States over dominance in the artificial intelligence (AI) sector.
During a CNBC interview last month, Lutnick stated, "We don’t give them our best stuff, not our second best stuff, not even our third best stuff," referring to AI chips supplied to China. He added that the US strategy was to supply enough technology to make Chinese AI developers "addicted" to American technology. These remarks were perceived as offensive by members of the Chinese government.
As a result, China’s government is now discouraging domestic companies from purchasing Nvidia’s older H20 AI chips, which are widely used in China for AI development. These chips were reportedly designed specifically for the Chinese market. According to reports from the Financial Times, Chinese tech firms have already halted or significantly reduced their purchases of these chips.
The US has imposed export restrictions preventing Nvidia from selling its most advanced AI chips to China, citing concerns over technology copying. However, Nvidia is reportedly planning to release a new, powerful AI chip tailored for the Chinese market in the future.
The boycott reflects the broader conflict between the two largest economies over control of AI technology. Analysts cited by the Handelsblatt anticipate that Nvidia’s upcoming quarterly earnings report, scheduled for August 27, 2025, may reflect uncertainties in the China business segment due to this dispute.
Nvidia CEO Jensen Huang has not publicly commented on the boycott. Despite the tensions, Nvidia’s stock price has not yet shown significant impact, underscoring the company’s dominant position in the global AI chip market.
The incident highlights the sensitive nature of US-China relations in high-tech industries and the potential economic consequences of diplomatic rhetoric. The Financial Times quoted a source close to the Chinese government stating that Lutnick’s remarks have provided further impetus for China to promote its own domestic chip technologies.
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