NVIDIA Halts H20 GPU Production as China Turns Hostile

NVIDIA appears to be pulling the plug on its China-focused H20 GPU project, signaling a dramatic shift in the chip giant’s China strategy. The move comes after months of mounting pressure from both Washington and Beijing. Initially, the Trump administration had blocked H20 sales to China before allowing shipments again – though only under the condition that NVIDIA hand over 15% of its sales from the region.

Even with that concession, the damage was already staggering: the company wrote off $4.5 billion in inventory and forfeited another $8 billion in potential revenue. Given that China represented 13% of NVIDIA’s global sales last year – roughly $17 billion – the stakes couldn’t be higher.

According to The Information, NVIDIA has told component suppliers to halt work on the H20, suggesting the company no longer sees a viable path forward. At the same time, Beijing’s politburo has hardened its stance against American hardware, portraying reliance on NVIDIA chips as a dangerous dependency. Officials are reportedly warning Chinese tech firms about potential backdoors and considering outright bans on H20 deployments.

Yet this geopolitical battle has clear contradictions. Many Chinese AI projects, including those by Deepseek, still rely heavily on NVIDIA’s CUDA ecosystem. Despite alternatives like Huawei and AMD, developers remain reluctant to move away from NVIDIA’s well-established software and hardware integration. That’s why critics see the production halt less as a clean break and more as a costly pause while both sides play political chess.

Meanwhile, NVIDIA is already pushing forward with its next-generation B30 GPUs. Whether the new chip will be allowed through China’s gates – or whether NVIDIA’s $50 billion China revenue opportunity is slipping permanently away – remains an open question.