China doesn’t want local firms using Nvidia chips: The Chinese government has sent out missives discouraging the use of outdated semiconductors — especially Nvidia’s H20 processors, Bloomberg reports, citing unnamed sources close to the matter. While the guidance stops short of being an outright ban, it strongly advises against using the H20 model for government or national security-related activity, as well as by the private sector, the sources said.

What is Beijing worried about? Chinese officials are concerned that Nvidia's chips may have remote tracking and shutdown capabilities, a claim the company has strongly denied. The government is also strongly encouraging its companies to use domestically produced semiconductors instead of Western-made ones, going so far as to roll out energy efficiency standards that H20 models cannot meet, the news outlet reports.

A short-lived arrangement? Nvidia and Advanced Micro Devices (AMD) reached an agreement with the US government this week to pay a 15% levy on their chip sales to China, which, in return, granted the companies licenses to export semiconductors to China. Nvidia agreed to pay the fee on its H20 chips, while AMD will pay the fee on revenues from its MI308 chips.

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