Nvidia in Danger: Will China Lose Access to AI Chips?

The semiconductor industry has become the battleground of a technological war between the United States and China. Washington, concerned about preserving its strategic advantage in artificial intelligence, has already imposed several restrictions on the export of high-performance chips. Despite these measures, China has continued to make progress, prompting Donald Trump to consider tightening the limitations aimed at Nvidia. This initiative could reshape the balances of the global AI market and weaken American companies. Balancing national security imperatives and economic challenges, this decision is part of a strategy aimed at curbing Beijing’s technological rise. However, the effectiveness of these restrictions remains uncertain as Chinese companies double their efforts to circumvent these sanctions and develop their own alternatives.

Tightening Restrictions on Nvidia Chips

The Trump administration is considering tightening restrictions on the export of Nvidia processors to China, particularly targeting the H20 chip. Designed as a lighter version of the H100 to comply with U.S. regulations, this chip was intended to allow Nvidia to maintain a presence in the Chinese market while respecting existing sanctions. However, Washington believes that even in this limited configuration, the H20 could contribute to China’s advancements in artificial intelligence.

This decision is part of a fourth wave of restrictions since 2022, illustrating the United States’ desire to slow down Beijing’s technological progress. Despite these obstacles, China has unveiled the DeepSeek R1, an advanced artificial intelligence model that demonstrates its ability to reduce dependence on American semiconductors. This example fuels Washington’s concerns, which fears that Chinese efforts to circumvent these restrictions may ultimately render these measures ineffective.

An American Strategy with Mixed Results

American restrictions have certainly prevented Chinese companies from directly purchasing H100 and A100 chips, but they have not been sufficient to block Beijing’s technological rise. In response to these obstacles, Chinese tech giants have increased their reliance on local semiconductors produced notably by Huawei and Biren Technology. This adaptation allows them to gradually reduce their reliance on American technologies and continue their advancements in artificial intelligence.

At the same time, Chinese firms are exploiting another loophole: foreign cloud computing services. Rather than directly purchasing the banned chips, they rent computing power from international players, thus evading Washington’s restrictions. This ability to circumvent sanctions raises doubts about the real effectiveness of American measures, which could slow China down without necessarily hindering its long-term development.

Beyond China, this policy also undermines Nvidia, whose Chinese market accounted for nearly 25% of revenue in 2022. Moreover, with successive sanctions, those sales have dropped, prompting the company to rethink its business strategy. A further regulatory tightening risks exacerbating this trend and accelerating the development of alternative Chinese solutions, making these prohibitions increasingly ineffective.

The Trump administration finds itself facing a strategic dilemma. On one hand, it seeks to slow down China’s rise in AI, a critical sector for global defense and economy. On the other hand, these restrictions risk penalizing American companies and depriving them of a lucrative market, in an attempt to compel Beijing to accelerate its innovations. This technological war could, in the long run, strengthen Chinese independence and weaken U.S. influence over the semiconductor industry.

If Washington hopes to curb the rise of Chinese artificial intelligence, the actual impact of these restrictions remains uncertain. Beijing has already proven its ability to adapt, whether through the development of its own semiconductors or by circumventing sanctions via foreign cloud services. In the long term, these measures could accelerate China’s technological independence rather than slow it down, thereby reducing American influence in the semiconductor market. This standoff is only intensifying, with unpredictable consequences for the global balance of artificial intelligence.