Nvidia has told component suppliers including Samsung Electronics, Amkor Technology and Foxconn to suspend production work on the H20, the downgraded artificial-intelligence accelerator it is permitted to sell in China, according to The Information and confirmed by Reuters. The move follows informal guidance from several Chinese regulators urging domestic technology groups such as Alibaba and ByteDance to halt or scale back purchases of the chip amid security concerns. People familiar with the talks said the clampdown was triggered by U.S. Commerce Secretary Howard Lutnick, who said Washington allows China only "lower-tier" processors—remarks Beijing officials deemed “insulting.” The Cyberspace Administration of China, the Ministry of Industry and Information Technology and the National Development and Reform Commission subsequently mobilised to curb H20 sales, deepening tensions over advanced semiconductors between the world’s two largest economies. At the same time, leading Chinese municipalities are targeting at least 70 percent self-sufficiency in AI chips by 2027, Nikkei Asia reported. Cities including the inland data-centre hub of Guiyang have already told new facilities to source about 90 percent of their processors locally. Domestic suppliers such as Huawei, Cambricon and Biren are being prioritised as alternatives to Nvidia, which held roughly 80 percent of China’s AI accelerator market at the start of 2024. The production halt casts fresh uncertainty over Nvidia’s China strategy; the country accounted for about 13 percent of the company’s revenue in its last fiscal year. Nvidia, which reports earnings next week, said only that it continually manages its supply chain in response to market conditions.