China tells tech giants to halt Nvidia H20 orders after US "addicted" insult

Chinese regulators tightened informal pressure on major platforms to scale back purchases of Nvidia's China-specific H20 artificial-intelligence processor after comments by U.S. Commerce Secretary Howard Lutnick angered senior officials, according to people familiar with the matter. The Cyberspace Administration of China (CAC), the National Development and Reform Commission (NDRC), and the Ministry of Industry and information Technology (MIIT) coordinated the effort, viewing Lutnick's July 15 remarks as "insulting."

Within a week, the CAC issued "window guidance" instructing companies such as ByteDance and Alibaba to halt new H20 orders on security grounds and summoned Nvidia executives on July 31 over alleged "serious security issues," including claims, disputed by Nvidia, of location tracking and remote shutdown capability. MIIT reinforced the message in separate conversations with domestic tech leaders.

The NDRC, long focused on boosting chip self-reliance, followed with guidance asking firms to stop buying all Nvidia chips, including the H20. Several companies then paused or trimmed orders, underscoring how AI accelerators sit at the center of the escalating U.S.–China tech rivalry.

Lutnick's televised comments framed Washington's approach bluntly: the U.S. would not sell China its "best" or even "third-best" hardware and wanted Chinese developers "addicted" to the American tech stack. The phrasing touched a nerve in Beijing, feeding a harder line after the Trump administration allowed H20 sales to resume while keeping top-of-the-line processors off-limits. Some Chinese buyers are now waiting to see whether a downgraded Blackwell-generation chip will be cleared for export to China.

Nvidia had, until recently, seen enough interest to ask TSMC to restart H20 production lines following CEO Jensen Huang's high-profile visit to Beijing. The regulatory push is a setback to that momentum.

Beijing has urged wider adoption of domestic silicon, and broader testing over recent months has made some firms more willing to pivot, especially for "inference," where chips from Huawei and Cambricon have gained traction. Even so, Nvidia's software ecosystem still anchors many deployments and complicates any rapid switch. Some policymakers advocate a full ban on foreign chips for inference, but a constrained local supply makes an immediate ban unlikely. New production lines slated for next year could ease that bottleneck.