This article first appeared on GuruFocus.
Nvidia Corp. (NVDA, Financials) will have to live with restrictions on how it sells artificial intelligence chips to China, U.S. Commerce Secretary Howard Lutnick said Tuesday.
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Speaking to reporters, Lutnick emphasized that detailed licensing conditions were developed with the State Department to regulate Nvidia’s sales of its H200 accelerators. The license terms are very detailed, and those terms Nvidia must live with, he said, according to comments obtained.
The restrictions stem from an agreement last year under which President Donald Trump approved limited H200 sales to China in exchange for 25% of the revenue generated from those chips. Last month, Beijing informed domestic firms including Alibaba Group Holding Ltd., Tencent Holdings Ltd., and others that they could begin preparing orders.
The fate of potential shipments to ByteDance Ltd. remains uncertain as negotiations continue over usage conditions tied to U.S. national security concerns.
The Biden administration and Congress have maintained tight oversight of AI chip exports to China amid fears the technology could strengthen Beijing’s military and surveillance capabilities. Nvidia shares dipped slightly following Lutnick’s remarks.