($) H20 and the Broken Export Control Debate
Guess what, Chinese tech companies hate Huawei too!
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Since Nvidia announced two weeks ago that the export control ban on its H20 chip has been lifted, the debate around the wisdom of this policy shift has been hot and heavy. Watching this debate unfold as the White House rolled out its AI Action plan last week (I wrote about it here), it appears that this debate is fundamentally broken.
How so? Because both sides, whether you love the policy change as a master stroke of technology domination over China or hate it with every fiber of your being, use the same evidence to support their case: large H20 orders placed by Chinese tech companies.
See these large H20 orders? We are getting those Chinese hooked on our 4th best chips and the American AI stack domination continues!
See these large H20 orders? The Chinese are clearly using these super duper advanced chips to turbo charge their AI ambition and their military!
This is how you know the debate is broken.
Indeed, the orders are large and possibly getting larger. In addition to the stockpile (600,000 to 700,000 H20 chips) that Nvidia had to write off because of the ban placed in April, but can now sell (license pending still), there is reporting that an additional 300,000 H20 chips are being ordered to meet more demand. That’s about 1 million H20s total.
Both sides are somewhat, partially right, even without using the large H20 orders as justification. Some Chinese AI developers have been afraid of being “hooked” on inferior Nvidia products because domestic alternatives’ advancement would slow down – a dynamic I looked into two years ago. (Calling H20 the 4th best is also a bit generous. With GB200 systems in the market, GB300 soon to ship, and B100, B200, H200, H100 all available with decent supply, H20 is probably 6th best at best!) There has also been solid research done on Nvidia products being used, if not initially then eventually, for workloads that benefit the Chinese military.
But while both sides dig their heels using the same piece of fact, a simple business logic that explains the large H20 orders is ignored: Chinese tech companies don't want to be stuck with Huawei either!