Nvidia shares fell 0.32% Monday and slipped 0.27% pre-market Tuesday after Bloomberg reported China warned state firms against using its H20 chips over security concerns. Notices sent to domestic companies cited potential backdoor risks and questioned why Nvidia products were chosen over local alternatives, with state media labeling the H20 environmentally unfriendly and unreliable. Regulators raised similar issues directly with Nvidia, which said the chip is not for military or government infrastructure and that China has never relied on U.S. processors for state use. Analysts expect Nvidia’s China AI chip market share to drop in 2025 amid rising domestic competition and U.S. sanctions. Trump has indicated support for Nvidia’s plan to sell China a scaled-down Blackwell chip with up to 50% reduced performance.
