Beijing has ordered a halt in sales of Nvidia’s H20 artificial-intelligence chip after U.S. Commerce Secretary Howard Lutnick publicly said Washington should keep Chinese developers “addicted” to inferior American technology. People briefed on the matter told the Financial Times that the Cyberspace Administration of China has opened a security investigation into the H20 and summoned companies such as ByteDance, Alibaba, Tencent and Baidu, instructing them to scale back or cancel orders. The H20 is a pared-down version of Nvidia’s flagship AI accelerators, tailored to comply with U.S. export controls that bar top-tier processors from reaching China. Chinese lawmakers are now drafting legislation that could impose an outright ban on the chip, and some domestic cloud providers have already suspended procurement, according to industry sources. The clamp-down comes as Brussels and Washington negotiate measures that would also curb the flow of advanced AI semiconductors to China. Nvidia is racing to keep a foothold in its second-largest market by developing the Blackwell-based B30A, a processor designed to outperform Chinese rivals while staying within U.S. licensing rules. Even with official pressure to shift to home-grown suppliers such as Huawei and Cambricon, many Chinese developers remain dependent on Nvidia’s CUDA software ecosystem, underscoring the strategic leverage semiconductors now hold in U.S.–China relations.