China has told companies to refrain from using Nvidia's H20 chips after the chipmaker recently received approval to resume shipping the less-advanced artificial intelligence product, Bloomberg reported, citing sources familiar with the matter.
Authorities have recently told companies to avoid using the Nvidia chips, or those from Advanced Micro Devices, for government and national security use cases, according to the news outlet.
The report comes after the White House confirmed on Monday that both Nvidia and AMD have agreed to give 15% of all China revenues to the U.S. government.
Last month, both companies said they would soon resume China shipments after the administration started requiring export licenses earlier this year. Both Nvidia's H20 chip and AMD's MI380 were created to work around previous AI chip restrictions to China due to national security fears.
Shares of both stocks teetered on Tuesday before closing slightly higher.
During a press conference Monday, Trump called Nvidia's H20 chip "obsolete" and said he wouldn't allow the higher-end Blackwell shipments there without a 30% to 50% decrease in performance.
China is a key market for AI chipmakers such as Nvidia and AMD.
Earlier this year, Nvidia CEO Jensen Huang said getting pushed out of the China market would be a "tremendous loss" for the company. He estimated the country's AI market will hit $50 billion over the next two to three years.
Over the weekend, a social media account connected to Chinese state media said the H20 chips were not "safe."
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