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NVIDIA is reportedly ceasing production of its China-specific H20 GPU due to a convergence of economic challenges.
The Trump administration allowed NVIDIA to resume shipments of the H20 GPUs in exchange for a 15 percent cut of the manufacturer’s sales in China. Previously, stringent licensing requirements imposed by the Trump administration in April nearly halted all H20 GPU shipments to China and led to significant revenue losses. In its last fiscal quarter ending April, NVIDIA lost around $4.5 billion from inventory write-offs and purchase commitments, with an additional potential loss of $8 billion.
China, which accounted for 13 percent of NVIDIA’s total sales—equivalent to approximately $17 billion—in the previous fiscal year (ending January 26, 2025), is now increasingly sensitive to perceptions of dependence on American technology. This sentiment aligns with goals set by the Trump administration and echoed by US Commerce Secretary Howard Lutnick.
China’s politburo is actively discouraging its tech companies from purchasing NVIDIA’s H20 GPUs, citing fears of backdoor spyware. This has led to potential bans on the use of these chips in China. In response, NVIDIA is preparing its next-gen B30 chip to replace the H20. However, given the current unfavorable political climate towards NVIDIA in China, it remains uncertain whether the company will maintain a presence in the world’s second-largest economy.
