The Donald Trump administration is considering stricter limits on Nvidia’s H20 chip sales to China, due to DeepSeek AI and growing concerns over the Asian giant’s artificial intelligence related tech advancements, according to a Reuters report citing sources.
Discussions over the move began during Joe Biden’s presidency, as Nvidia’s H20 chips, compliant with US restrictions, enable AI software.
US May Tighten Curbs on Nvidia Chip Sales to China
The report cited three sources confirm that the United States government is considering tightening restrictions on the sale of Nvidia’s H20 chips, which are designed for the China market.
The talks are in early stages among Trump’s officials, but the restrictions have been under discussion since the Joe Biden presidency, they added.
What Is the Capability of Nvidia’s H20 Chips?
H20 chips can be used to run AI software and were designed to comply with existing US curbs on shipments to China. These limits were imposed by the previous US President Biden.
The report added that White House representatives did not respond to queries on the matter. Nvidia told the news agency that it is “ready to work with the administration as it pursues its own approach to AI.”
Nvidia fell 4 per cent on January 29, after the stock was hit with a record single-day loss of 17 per cent on January 27. It was the single heaviest weight dragging the S&P 500 lower, by far, according to an AP report.
China’s DeepSeek AI Rattles US Tech Stocks
DeepSeek AI, a low-cost Chinese AI start-up from Hangzhou, rattled US tech stocks and the global stock markets on January 27, tanking the value of chip maker Nvidia by as much as $593 billion overnight—a record 17 per cent one-day loss for the Silicon Valley golden child. According to LSEG data, it is a record one-day m-cap loss for a Wall Street stock in history.
The AI’s disruption hit Jensen Huang’s Nvidia the hardest, but the scenario was unpleasant across the board — the S&P 500 dropped, and the Nasdaq slumped over 3 per cent. Fears over the costly US endeavours in AI tech against the reportedly comparable Chinese alternative—available on open source and made at a fraction of the cost—was what largely dragged the markets.
Besides the low cost, DeepSeek’s R1 language model, which mimics aspects of human reasoning, also matched and outperformed OpenAI’s latest o1 model in various benchmarks. Overall, its recent advancement could lead to a decline in the market share of top AI companies like OpenAI, Microsoft, Google and Meta, while its pricing may push down the pricing of AI giants.
(With inputs from Reuters)
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