Relations between the US and China appear to have warmed, slightly, after the chipmaker Nvidia was given a green light by Washington to resume sales of its H20 AI chip to Chinese companies. Nvidia’s chief executive, Jensen Huang, revealed earlier this week that the US government had assured his company that licenses for H20 chip sales to China would be granted, and that deliveries could start soon. That reverses a restriction announced in April, when the White House announced tighter controls on exports of computer chips used for artificial intelligence. Today, Beijing has welcomed this change of heart, confirming that the US has ‘taken initiatives” to approve H20 sales to China again. China’s commerce ministry said in a statement that “win-win cooperation” was the right path to go down, and that it hoped the two countries could “meet each other halfway” and work together. The ministry also urged the US to abandon its “zero-sum mentality” and cancel "unreasonable" trade restrictions on China, warning that “suppression” would not lead to solutions. The H20 graphics processing unit, or GPU, is an advanced chip for use in AI systems. But it is less powerful than Nvidia’s top semiconductors today, as it was designed to comply with US restrictions for exports of AI chips to China. Earlier this week the US commerce secretary, Howard Lutnick, revealed that the renewed sale of H20 chips to China was linked to a rare earths magnet deal. He also claimed Nvidia would only be selling China its “fourth best” chip. Even so, the prospect of more sales to China pushed Nvidia’s shares to record highs this week. Orders from Chinese companies for H20 chips need to be sent by Nvidia to the US government for approval. Donald Trump’s trade war has loomed over the meeting of G20 finance ministers in South Africa this week. Japan told the gathering of advanced economies in Durban that tariffs are not the right way to fix trade imbalances. The finance minister, Katsunobu Katō, told reporters at the G20: “Japan said that tariffs aren’t really the right tool to fix excessive current accounts imbalances.” Kato argued that countries facing such situations need to address them through domestic efforts rather than slapping new levies on imports. The US’s trade balance (rarely the healthiest) has actually worsened this year, as American companies raced to import goods before tariffs were imposed. The US Treasury secretary, Scott Bessent, is not attending the G20. The agenda • 9.30am BST: UK insolvency data • 10am BST: eurozone construction output data for May • 1.30pm BST: US housing starts data for June • 3pm BST: University of Michigan consumer confidence report We'll be tracking all the main events throughout the day …
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