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- Nvidia said it would start selling its H20 chips in China again.David Sacks, the White House's AI czar, said the administration's volte-face is targeted at Huawei.He said Nvidia can compete for a "big slice" of China's market even with a "less capable chip."
David Sacks, the White House's AI and crypto czar, said on Tuesday that allowing Nvidia to sell its chips in China again will help keep the Chinese telecommunications giant Huawei at bay.
"There is a compelling argument here that you just don't want to hand Huawei the entire Chinese market when Nvidia is capable of competing for a big slice of it with a deprecated, less capable chip," Sacks said in an interview with Bloomberg's Ed Ludlow.
Nvidia said in a blog post on July 14 that it was "filing applications to sell the NVIDIA H20 GPU again." The H20 chip is a China-specific product that Nvidia developed to meet chip export restrictions that the Biden administration had imposed. The chip was designed to be technologically inferior as compared to Nvidia's other offerings.
"The US government has assured NVIDIA that licenses will be granted, and NVIDIA hopes to start deliveries soon," the post added.
In April, Nvidia said the Trump administration wanted them to apply for special licenses if they wanted to sell their chips to China. Nvidia said it expected a charge of up to $5.5 billion due to those restrictions.
Sacks said on Tuesday that the administration's volte-face is "nuanced" and "makes a lot of sense" when you consider the threat posed by Huawei.
"We're not selling our latest greatest chips to China, but we can deprive Huawei of basically having this giant market share in China that they can then use to scale up and compete with us globally," Sacks told Ludlow.
Last month, Sacks said in a separate interview with Bloomberg that "overly restrictive" chip export controls would hurt rather than help US tech dominance.
"China is maybe one and a half to two years behind us in chip design. But Huawei is moving fast to catch up. And even before they fully caught up, I think you will see them exporting their chips for the global market," Sacks said.
Sacks isn't the only one who's wary of Huawei.
Jensen Huang, the CEO of Nvidia, said in an interview with the Financial Times published in March that Huawei is the "single most formidable technology company" in China.
Huang said Huawei's "presence in AI is growing every single year" and Nvidia "can't assume they are not going to be a factor."
"They have conquered every market they've engaged," Huang said of Huawei. He added that the US government's attempts to cap Huawei have been "done poorly."
Nvidia's stock climbed by as much as 5% on Tuesday after it said it would resume its chip sales to China.
The White House did not respond to a request for comment from Business Insider. A spokesperson for Nvidia declined to comment.
