China reportedly discouraged purchase of NVIDIA AI chips due to 'insulting' Lutnick statements

China reportedly discouraged local companies from purchasing NVIDIA's H20 AI chips due to "insulting" remarks made by US Commerce Secretary Howard Lutnick. The Chinese authorities, including the Cyberspace Administration of China (CAC), the National Development and Reform Commission (NDRC), and the Ministry of Industry and Information Technology (MIIT), sought to intensify efforts to push the use of homegrown chips after Lutnick's comments in a CNBC interview. Lutnick stated that the US does not sell China its "best stuff," aiming to keep China dependent on American technology. In response, the Chinese authorities issued informal notices to major tech firms, such as ByteDance and Alibaba, instructing them to stop new orders for H20 chips until a national security review is completed. Meanwhile, NVIDIA is reportedly developing a new chip for the Chinese market that is more powerful than the H20 but less capable than the company's Blackwell Ultra GPUs. The regulatory and export approval for this new chip are not yet guaranteed.