Core Viewpoint - The recent approval of the H20 chip for sale in China marks a significant shift in U.S. chip policy, reflecting the complex interplay between political interests and commercial benefits in the ongoing U.S.-China tech rivalry [1][3]. Group 1: Policy Changes - In April 2025, the U.S. imposed a ban on the H20 chip, leading to a $5.5 billion inventory write-down for Nvidia and a 6% drop in its stock price [3]. - By July 15, 2025, the policy was reversed, allowing the H20 chip to enter the Chinese market, resulting in a surge in related A-share stocks, with Zhongji Xuchuang rising by 16.58% in a single day [3][5]. Group 2: Strategic Motivations - The reversal of the U.S. policy is driven by three main pressures: technological competition, capital market impacts, and political calculations [5][7]. - The technological gap between U.S. and Chinese chips is narrowing, with Huawei's Ascend 910B chip achieving 148 TFLOPS, only slightly behind the H20's 160 TFLOPS [5]. - The capital impact of the ban led to a $155 billion loss in Nvidia's market value and a 30% drop in ASML's lithography machine orders, prompting the semiconductor industry to lobby the White House [5]. Group 3: Commercial Dynamics - Nvidia's CEO, Jensen Huang, indicated a deal with the U.S. government involving a $500 billion investment in AI data centers over four years in exchange for H20 export approval, highlighting the tension between U.S. efforts to contain China and the need for commercial gains [7]. - The H20 chip's technical limitations, such as only achieving 28% of the FP16 performance of the H100 and using less efficient interconnect technology, suggest a strategic attempt to limit China's technological advancement [8]. Group 4: Market Implications - Despite the H20's limitations, demand in China's medical and educational sectors remains high due to the dominance of the CUDA ecosystem, which 90% of global AI developers rely on [10]. - The dependency on the H20 chip poses long-term risks for China's tech independence, as local alternatives like Huawei's Ascend series and Cambricon's MLU370 are still developing their software ecosystems [10][11]. Group 5: Future Outlook - The U.S. may continue to implement "dynamic controls," allowing the export of older generation products while China must focus on breaking the CUDA monopoly, accelerating chiplet technology commercialization, and building a self-sufficient semiconductor equipment system [11]. - Huang's statement about China accounting for 20% of Nvidia's revenue underscores the ultimate logic of this geopolitical struggle: commercial interests may eventually override political barriers [11].