The chip that the Trump administration this month has started allowing Nvidia, America’s leading chip maker, to sell to China has become a focal point in the increasingly tense competition for ascendancy over artificial intelligence.
The administration’s decision amounted to a major reversal of a yearslong effort by Washington to restrain China’s technological and military progress by controlling its access to advanced American technology.
In China, tech industry insiders and analysts said the Nvidia chip would help sustain the country’s A.I. progress while Nvidia’s Chinese rivals like Huawei race to improve domestic alternatives.
But on Thursday, the Chinese government’s internet regulator, the Cyberspace Administration of China, said that it had summoned Nvidia to explain security risks associated with the chip, including whether it had the ability to track users’ locations.
The move underscores the political sensitivities surrounding the chip, a lower performance but still coveted model known as the H20.
Nvidia’s chief executive, Jensen Huang, sees the ability to sell the H20 in China as crucial to the company’s efforts to hold on to its position as the leading maker of the infrastructure that powers advanced artificial intelligence.
For China, access to the chip promises to enable its tech companies to continue their path in developing cutting edge artificial intelligence systems. At the same time, China’s chipmakers are racing to close the gap with Nvidia and their other American rivals.
At China’s annual A.I. conference in Shanghai this week, the mood among China’s tech companies was triumphant. Their message: Despite Washington’s attempts to slow its gains, China was at the forefront of the global A.I. wave.
At the same gathering last year, the question was how China could push its A.I. industry forward without access to American technology, including Nvidia’s chips and ChatGPT, the chatbot by OpenAI, a Silicon Valley company. But this year, the focus was on how far Chinese technology had come, and Beijing’s ambition to influence the global development of artificial intelligence.
Huawei displayed a massive cluster of chips meant to compete directly with Nvidia in running the calculations that power advanced A.I. systems. The Chinese internet company Alibaba unveiled a pair of A.I.-enabled eyeglasses. And dozens of start-ups showed off robots, which mixed with crowds on the exhibition floor, danced to songs by Lady Gaga and competed in boxing matches.
Premier Li Qiang, China’s highest-ranking official after Xi Jinping, said in remarks at the conference that artificial intelligence should become a global public good, according to a summary published by China’s Ministry of Foreign Affairs.
China was willing to “share development experiences and technological products to help countries around the world,” Mr. Li said.
His remarks aimed to position China as a ready collaborator. By contrast, a few days earlier, President Trump had outlined a plan for A.I. that declared the United States should command the global race to develop the technology.
The move by China was “a propaganda win,” said Samm Sacks, a senior fellow at the Paul Tsai China Center at Yale Law School.
“The first sentence of the American A.I. action plan is about global dominance, while the tagline of the conference in China is ‘global solidarity,’” Ms. Sacks said.
Over the past year, Chinese companies have embraced making their systems available publicly. Alibaba and DeepSeek, a Chinese start-up, have released open-source A.I. systems that rank among the world’s top performers. This month, the Beijing start-ups Moonshot AI and Z.ai, formerly Zhipu AI, published details of new models that the companies said excelled at coding and math.
The Trump administration’s decision to reverse course and allow Nvidia to sell the H20 will help China’s leading A.I. companies buy time at a crucial moment, experts said.
Chinese A.I. companies will buy the Nvidia chips to keep improving their technology in the near term while they wait for Chinese chipmakers to make adequate substitutes, said Lucy Xinyi Chen, a venture investor and a founder of the Beijing data analysis company GrowingIO.
“The big model and infrastructure companies are certain to be buying more chips right now, which will only help take their models to the next level,” Ms. Chen said.
Nvidia supplies chips and software to companies around the world to power A.I. systems. Chinese companies have continued to acquire them through intermediaries and a thriving black market despite the yearslong bid by officials in Washington to hold back China’s technological and military progress by cutting off the flow of these chips to China.
At the same time, the Chinese government has spent billions of dollars to push Chinese companies like Huawei to make chips that perform as well as Nvidia’s.
Huawei’s chips remain expensive, inefficient and prone to defects. But some said the presence of Nvidia’s chips in the Chinese market would spur Huawei to improve its technology faster.
“Open competition is good for everyone,” said William Xu, deputy secretary-general at the Shanghai Artificial Intelligence Industry Association.
Xinyun Wu contributed research from Taipei, Taiwan.
Meaghan Tobin covers business and tech stories in Asia with a focus on China and is based in Taipei.
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