Controversy Surrounds Nvidia's AI Chip Sales to China

The resumption of Nvidia's sales of H20 AI chips to China has sparked significant controversy in the U.S. government. On Friday, the chairman of the House Select Committee on China expressed strong opposition in a letter to Commerce Secretary Howard Lutnick, voicing concerns that this move could boost China's AI capabilities and let its companies capture the global AI model market share.

This week's decision to lift the export restriction, initially imposed in April to protect national security, has not gone unchallenged. It garnered immediate criticism from U.S. lawmakers, who are worried that the Chinese Communist Party could use American technology to enhance military capabilities and suppress domestic dissent. Republican Representative John Moolenaar emphasized, "We can't let the CCP utilize American chips towards goals that undermine U.S. interests."

Nvidia confirmed earlier in the week that the U.S. government cleared the continuation of H20 sales to China, a key revenue stream for the tech giant. This development marks a potential shift in U.S. policy on exporting AI technology to China. Despite this approval, Nvidia's stock took a downturn on Friday, reflecting investor unease surrounding this contentious decision.

(With inputs from agencies.)