Nvidia in talks with U.S. to sell more advanced chip to China: Huang

Nvidia is in talks with the U.S. government about shipping a new, more advanced chip to China, CEO Jensen Huang said on Friday.

Earlier this week, Reuters reported the U.S. tech giant is developing a new artificial intelligence chip for China, dubbed the B30A, that will be more powerful than the H20 — the only semiconductor Nvidia is allowed to sell in the country at present. The U.S. has grown concerned in the past few years that advanced American chips could be used in Chinese military applications.

A journalist asked Huang about the B30A during a trip to Taiwan.

“Offering a new product to China for the data center, AI data centers, the follow on to H20, that’s not our decision to make. It’s up to of course the United States government. And we are in dialogue with them. But it’s too soon to know,” Huang said in response.

Last month, Huang said he hopes that Nvidia can sell more advanced chips in China than the H20 during a visit to the country.

Nvidia’s position in China has become a headache for Huang. The company created a special, less-advanced chip for China called the H20, which this year the U.S. government restricted for export. In July, Nvidia said it had given permission to sell this chip again in China. Later, it was revealed that Nvidia will give 15% of its China chip sales to the U.S. government in exchange for export licenses.

Just as it appeared that Nvidia was back in China, it hit other roadblocks, with Chinese authorities raising concerns this month about potential security vulnerabilities in the company’s chips. Nvidia said its products do not have “kill switches and backdoors” built into them.

Several reports this month have suggested that the Chinese government has urged local companies not to use Nvidia chips.

Huang has argued that Nvidia should be allowed to sell its chips to China, so that the country’s AI is built on American technology and domestic tech giants like Huawei don’t fill the void.

That message appeared to get through to Washington. In July, when the H20 was approved for export again, U.S. Commerce Secretary Howard Lutnick told CNBC that the move was allowed because Nvidia would not be giving over its best technology.

“We don’t sell them our best stuff, not our second best stuff, not even our third best,” Lutnick said.

However, the Financial Times reported on Thursday that these comments were seen as “insulting” by Chinese officials and that local regulators are moving to dissuade domestic firms from buying the H20.

A report by the The Information on Friday said that Nvidia has asked some of its component suppliers to stop production related to the H20 graphics processing units.

The company’s shares were down 1.34% in premarket trading at 5:53 a.m. E.T.

– CNBC’s Dylan Butts contributed to this report.