Global automakers are licensing Chinese electric vehicle technology to accelerate development and cut costs. Audi built its E5 Sportback in 18 months using SAIC's batteries, powertrain and software after the Zeekr 001 "shocked quite everyone" in 2021, according to Stefan Poetzl, president of SAIC Audi Sales and Marketing. Toyota and Volkswagen have joint development agreements for China-specific models using GAC and Xpeng technology respectively.

Renault and Ford plan to develop global models on Chinese platforms, according to Reuters. The licensing deals provide Chinese automakers additional revenue amid domestic price wars. Ready-made Chinese EV chassis and software can save billions of dollars and years of development time, industry experts told the publication. CATL and other Chinese suppliers are expanding chassis production for domestic and international customers.

A group led by RSS co-creator Eckart Walther has launched a new protocol designed to standardize and scale licensing of online content for AI training. Backed by publishers like Reddit, Quora, Yahoo, and Medium, Real Simple Licensing (RSL) combines machine-readable terms in robots.txt with a collective rights organization, aiming to do for AI training data what ASCAP did for music royalties. However, it remains to be seen whether AI labs will agree to adopt it. TechCrunch reports: According to RSL co-founder Eckart Walther, who also co-created the RSS standard, the goal was to create a training-data licensing system that could scale across the internet. "We need to have machine-readable licensing agreements for the internet," Walther told TechCrunch. "That's really what RSL solves."

For years, groups like the Dataset Providers Alliance have been pushing for clearer collection practices, but RSL is the first attempt at a technical and legal infrastructure that could make it work in practice. On the technical side, the RSL Protocol lays out specific licensing terms a publisher can set for their content, whether that means AI companies need a custom license or to adopt Creative Commons provisions. Participating websites will include the terms as part of their "robots.txt" file in a prearranged format, making it straightforward to identify which data falls under which terms.

On the legal side, the RSL team has established a collective licensing organization, the RSL Collective, that can negotiate terms and collect royalties, similar to ASCAP for musicians or MPLC for films. As in music and film, the goal is to give licensors a single point of contact for paying royalties and provide rights holders a way to set terms with dozens of potential licensors at once. A host of web publishers have already joined the collective, including Yahoo, Reddit, Medium, O'Reilly Media, Ziff Davis (owner of Mashable and Cnet), Internet Brands (owner of WebMD), People Inc., and The Daily Beast. Others, like Fastly, Quora, and Adweek, are supporting the standard without joining the collective.

Notably, the RSL Collective includes some publishers that already have licensing deals -- most notably Reddit, which receives an estimated $60 million a year from Google for use of its training data. There's nothing stopping companies from cutting their own deals within the RSL system, just as Taylor Swift can set special terms for licensing while still collecting royalties through ASCAP. But for publishers too small to draw their own deals, RSL's collective terms are likely to be the only option.

Apple's newly launched iPhone Air will ship globally without physical SIM card slots. The move follows the company previously eliminating SIM trays in US models starting in 2022.

Global consultancy firm Roland Berger forecasts eSIM connections will reach 75% of smartphone connections by 2030, rising from 10% in 2023. CCS Insight predicts eSIM-capable handsets will increase from 1.3 billion to 3 billion by 2030. Google offers eSIM-only Pixel 10 models in the US.

An anonymous reader quotes a report from Reuters: President Donald Trump said on Thursday his administration would impose tariffs on semiconductor imports from companies not shifting production to the U.S., speaking ahead of a dinner with major technology company CEOs. "Yeah, I have discussed it with the people here. Chips and semiconductors -- we will be putting tariffs on companies that aren't coming in. We will be putting a tariff very shortly," Trump said without giving an exact time or rate.

"We will be putting a very substantial tariff, not that high, but fairly substantial tariff with the understanding that if they come into the country, if they are coming in, building, planning to come in, there will not be a tariff," Trump told reporters. "If they are not coming in, there is a tariff," Trump said in his comments on semiconductors. "Like, I would say (Apple CEO) Tim Cook would be in pretty good shape," he added, as Cook sat across the table. Further reading: Trump Basks in Tech Leaders' Spending Vows at White House Dinner

Alphabet's Google was hit with a $3.45 billion EU antitrust fine on Friday for anti-competitive practices in its lucrative adtech business, marking its fourth penalty in its decade long fight with EU competition regulators. From a report: The move by the European Commission was triggered by a complaint from the European Publishers Council and comes amid a threat by U.S. President Donald Trump to retaliate against the European Union for any push against Big Tech.

The EU competition enforcer had originally planned to hand out the fine on Monday but opposition from EU trade chief Maros Sefcovic on concerns about the impact on U.S. tariffs on European cars derailed EU antitrust chief Teresa Ribera's plan. The Commission said Google favored its own online display technology services to the detriment of rivals and online publishers and that it abused its market power since 2014 until today.

Shenzhen-Hong Kong-Guangzhou has overtaken Tokyo-Yokohama to become the world's top cluster for innovation, the United Nations said Monday. From a report: The UN's World Intellectual Property Organization (WIPO) said the Chinese cluster had leapfrogged its Japanese rival in its 2025 Global Innovation Index. The change at the top of the world's 100 leading innovation clusters was down to WIPO broadening the criteria to include venture capital investments to formulate the annual rankings.

The UN agency dealing with patenting and innovation previously only used patent filing and scientific publishing data to identify local concentrations of world-leading innovation activity. "Venture capital investment activity helps capture how scientific and technological knowledge translates into start-up creation and, ultimately, new goods and services in the marketplace," WIPO said. The agency said Shenzhen-Hong Kong-Guangzhou and Tokyo-Yokohama "make a massive contribution to global scientific publications and patenting outputs", together accounting for nearly one in five patent applications filed globally.

There's something rare about a snail named Ned, reports CNN: Ned's shell spirals left, while almost all other snails have right spiraling shells. It's a one in 40,000 genetic condition among the common corno espersum... "I was quite breathless for a moment," says Giselle Clarkson, an author, illustrator and self-described 'observologist' who found Ned while digging in her garden in Wairarapa, just north of capital Wellington. "I was just pulling out this plant, and a snail tumbled into the dirt and I was just about to scoop it up and just chuck it off to the side, when I realized what I had," Clarkson told CNN. It was a serendipitous moment for Ned, now named for Homer Simpson's left-handed neighbor. Clarkson was aware of this rare asymmetry in snails from her work with the magazine New Zealand Geographic.
But "should Ned hope to mate one day, it will have to be with another very rare left-coiled snail," notes the Washington Post (since, as CNN points out, this snail's reproductive organs "don't line up" with those of snails with right-spiraling shells). This has sparked a national campaign to locate a compatible snail — something that was last successfully attempted in 2016.

"If 40,000 people read this," the campaign explains, "chances are, Ned's dreams will come true."

An anonymous reader quotes a report from TechCrunch: SpaceX has long marketed Starship as a fully and rapidly reusable rocket that's designed to deliver thousands of pounds of cargo to Mars and make life multiplanetary. But reusability at scale means a space vehicle that can tolerate mishaps and faults, so that a single failure doesn't spell a mission-ending catastrophe. The 10th test flight on Tuesday evening demonstrated SpaceX's focus on fault tolerance. In a post-flight update, SpaceX said the test stressed "the limits of vehicle capabilities." Understanding these edges will be critical for the company's plans to eventually use Starship to launch Starlink satellites, commercial payloads, and eventually astronauts.

When the massive Starship rocket lifted off on its 10th test flight Tuesday evening, SpaceX did more than achieve new milestones. It purposefully introduced several faults to test the heat shield, propulsion redundancy, and the relighting of its Raptor engine. The heat shield is among the toughest engineering challenges facing SpaceX. As Elon Musk acknowledged on X in May 2024, a reusable orbital return heat shield is the "biggest remaining problem" to 100% rocket reusability. The belly of the upper stage, also called Starship, is covered in thousands of hexagonal ceramic and metallic tiles, which make up the heat shield. Flight 10 was all about learning how much damage the ship can accept and survive when it goes through atmospheric heating. During the tenth test, engineers intentionally removed tiles from some sections of the ship, and experimented with a new type of actively cooled tile, to gather real-world data and refine designs. [...]

Propulsion redundancy was also put to the test. The Super Heavy booster's landing burn configuration appeared to be a rehearsal for engine failure. Engineers intentionally disabled one of the three center Raptor engines during the final phase of the burn and used a backup engine in its place. That was a successful rehearsal for an engine-out event. Finally, SpaceX reported the in-space relight of a Raptor engine, described on the launch broadcast as the second time SpaceX has pulled this off. Reliable engine restarts will be necessary for deep-space missions, propellant transfers, and possibly some payload deployment missions. [...] The next step is translating Flight 10 data into future hardware upgrades to move closer to routine operations and days when, as Musk envisioned, "Starship launches more than 24 times in 24 hours."

Struggling small biotech firms are pivoting into cryptocurrencies, rebranding as "crypto treasuries" or stockpiling digital assets like Ether and Litecoin as a last-ditch effort to boost share prices amid stalled funding and weak drug pipelines. Bloomberg reports: Shares of 180 Life Sciences Corp., now doing business as ETHZilla, tripled after the Peter Thiel-backed company said it had accumulated Ether tokens worth over $350 million. Less than two weeks later, the stock's gains have been erased. In July, Sonnet BioTherapeutics Holdings soared 243% in one volatile session on plans to transform into a public crypto treasury while MEI Pharma Inc. initially doubled on plans to sell shares to fund a Litecoin treasury.

Such about-faces are a tried-and-true formula for small firms when funds are low and shares are under pressure. For drugmakers it can be a sudden shift to chase after trendy new treatment targets, still other companies rebrand with buzzwords like artificial intelligence to juice returns. Now some biotech executives are using digital coins to pump new life into flagging shares. So far in 2025, at least 10 biotechs have announced a pivot into digital assets. The announcements frequently spark frenzied, but short-lived, spikes in shares. "If they're low on ideas, if they can't find relevance in drug development, they're going to try to justify their existence as management in another way," according to Mike Taylor, lead portfolio manager of the Simplify Health Care ETF. "You have a handful of companies trying to reinvent themselves into some other tangent. And, most, if not all won't work out."

A group representing the world's biggest stock exchanges has called on securities regulators to clamp down on so-called tokenised stocks, arguing that the blockchain-based tokens create new risks for investors and could harm market integrity. From a report:
Crypto exchange Coinbase and broker Robinhood are among those making a push into the nascent sector that could shake up the securities investing landscape. Proponents say tokenised equities can cut trading costs, speed up settlement and facilitate around-the-clock trading. The World Federation of Exchanges (WFE), in a letter sent to three regulatory bodies last Friday, said it was concerned the tokens "mimic" equities without providing the same rights or trading safeguards.

Yahoo Finance interviews Peter Cappelli, a Wharton professor of management, on "the business case for employers pushing for workers to get back to the office." (Cappelli has co-written a new book with workplace strategist Ranya Nehmeh titled In Praise of the Office: The Limits to Hybrid and Remote Work ...) Yahoo Finance: What's wrong with a hybrid work arrangement?

Cappelli: People just don't come in. That's maybe the single biggest factor. There is a growing awareness that people are really never there on their anchor days. If you want that for your company, you have to manage that attendance...

Yahoo Finance: What's the compelling advantage of in-person work?

Cappelli: There's value in human interaction, what we learn from each other, the cooperation that we can get in solving problems, and the motivation and commitment that comes from being around other people... When you first began your career, imagine what it would've been like if no one was in the office. You'd be completely lost.

If you think about how we learn about office work, we learn by watching. You learn what the values of the organization are. You learn it from the conversations in the office. You can see how the boss reacts to different requests and different problems. As you advance, you've got your ear to the ground, and you've got the opportunity to raise your hand and pitch in and have some influence. You can catch the boss between meetings and pass along a little tidbit of information, and you develop relationships with people where you can solve problems... Those are the kind of things that we miss when we move to remote — in addition to the general fact that people are energized by working with people.

With remote work, people also spend more time in meetings that are worthless. A lot of those things could be fixed, but the problem is they're not.
He argues remote work isn't as widespread as it seems. ("In Europe, for example, where employees have always had more power, I figured remote work would stay. It hasn't. Most everybody's gone back to the office.") Even in the U.S., 70% of employers are in-office, all the time. ("[M]ost employers are small. Remote work and hybrid work, in particular, is largely a big city, big company phenomenon... It's only white-collar jobs.")

And fewer jobs offered are being offered with remote-working options, he believes, now that the labor market has softened. "CEOs are now thinking we're losing something, and the employee resistance to return to the office has weakened.... The longer you wait, the harder it is to ever get people to come back without a big fight. " Cappelli: Right now, people might be saying, 'I will quit if I have to go back to the office,' but it turns out they don't mean it. The reason, of course, is it's one thing to say that you will quit; it's another to actually walk away from a paycheck...

If you opt for remote or hybrid, good outcomes don't happen by themselves. You can make it work, but it requires more time and effort for management, more rules, more practices, more leadership.

The Atlantic reports some YouTube users noticed their uploaded videos have since "been subtly augmented, their appearance changing without their creators doing anything..."

"For creators who want to differentiate themselves from the new synthetic content, YouTube seems interested in making the job harder." When I asked Google, YouTube's parent company, about what's happening to these videos, the spokesperson Allison Toh wrote, "We're running an experiment on select YouTube Shorts that uses image enhancement technology to sharpen content. These enhancements are not done with generative AI." But this is a tricky statement: "Generative AI" has no strict technical definition, and "image enhancement technology" could be anything. I asked for more detail about which technologies are being employed, and to what end. Toh said YouTube is "using traditional machine learning to unblur, denoise, and improve clarity in videos," she told me. (It's unknown whether the modified videos are being shown to all users or just some; tech companies will sometimes run limited tests of new features.)

While running this experiment, YouTube has also been encouraging people to create and post AI-generated short videos using a recently launched suite of tools that allow users to animate still photos and add effects "like swimming underwater, twinning with a lookalike sibling, and more." YouTube didn't tell me what motivated its experiment, but some people suspect that it has to do with creating a more uniform aesthetic across the platform. As one YouTube commenter wrote: "They're training us, the audience, to get used to the AI look and eventually view it as normal."

Google isn't the only company rushing to mix AI-generated content into its platforms. Meta encourages users to create and publish their own AI chatbots on Facebook and Instagram using the company's "AI Studio" tool. Last December, Meta's vice president of product for generative AI told the Financial Times that "we expect these AIs to actually, over time, exist on our platforms, kind of in the same way that [human] accounts do...."

This is an odd turn for "social" media to take. Platforms that are supposedly based on the idea of connecting people with one another, or at least sharing experiences and performances — YouTube's slogan until 2013 was "Broadcast Yourself" — now seem focused on getting us to consume impersonal, algorithmic gruel.

Gaming handhelds are becoming the industry's new battleground as Microsoft launches its ROG Xbox Ally devices October 16, chasing Nintendo Switch 2's record-breaking 5.8 million units sold in seven weeks. The ASUS-manufactured handhelds run full Windows 11 with a gaming-optimized interface, accessing Xbox Game Pass, Steam, Battle.net, and other PC storefronts without platform lockdown.

Two models arrive at launch: the standard Xbox Ally with AMD Ryzen Z2 A processor and the premium Xbox Ally X featuring Ryzen AI Z2 Extreme, 24GB RAM, 1TB storage, and 80Wh battery. Microsoft's Handheld Compatibility Program pre-verifies thousands of PC games for portable play. Pricing remains unannounced.

Matt Garman, Amazon's cloud boss, has a warning for business leaders rushing to swap workers for AI: Don't ditch your junior employees. From a report: The Amazon Web Services CEO said on an episode of the "Matthew Berman" podcast published Tuesday that replacing entry-level staff with AI tools is "one of the dumbest things I've ever heard."

"They're probably the least expensive employees you have. They're the most leaned into your AI tools," he said. "How's that going to work when you go like 10 years in the future and you have no one that has built up or learned anything?" Garman said companies should keep hiring graduates and teaching them how to build software, break down problems, and adopt best practices.

He also said the most valuable skills in an AI-driven economy aren't tied to any one college degree. "If you spend all of your time learning one specific thing and you're like, 'That's the thing I'm going to be expert at for the next 30 years,' I can promise you that's not going to be valuable 30 years from now," he said.

A real estate developer searched Google for a cruise ship company's customer service number, reports the Washington Post, calling the number in Google's AI Overview. "He chatted with a knowledgeable representative and provided his credit card details," the Post's reporter notes — but the next day he "saw fishy credit card charges and realized that he'd been fooled by an impostor for Royal Caribbean customer service."

And the Post's reporter found the same phone number "appearing to impersonate other cruise company hotlines and popping up in Google and ChatGPT" (including Disney and Carnival's Princess line): He'd encountered an apparent AI twist on a classic scam targeting travelers and others searching Google for customer help lines of airlines and other businesses... The rep knew the cost and pickup locations for Royal Caribbean shuttles in Venice. [And "had persuasive explanations" when questioned about paying certain fees and gratuities.] The rep offered to waive the shuttle fees...

Here's how a scam like this typically works: Bad guys write on online review sites, message boards and other websites claiming that a number they control belongs to a company's customer service center. When you search Google, its technology looks for clues to relevant and credible information, including online advice. If scammer-controlled numbers are repeated as truth often enough online, Google may suggest them to people searching for a business.

Google is a patsy for scammers — and we're the ultimate victims. Google's AI Overviews and OpenAI's ChatGPT may use similar clues as Google's search engine to spit out information gleaned from the web. That makes them new AI patsies for the old impostor number scams.
"I've seen so many versions of similar trickery targeting Google users that I largely blame the company for not doing enough to safeguard its essential gateway to information," the reporter concludes, (adding "So did two experts in Google's inner workings.") The Post is now advising its reader to "be suspicious of phone numbers in Google results or in chatbots."

Reached for comment, a Google spokesman told the Post they'd "taken action" on several impostor numbers identified by the reporter. That spokesman also said Google continues to "work on broader improvements" to "address rarer queries like these." OpenAI said that many of the webpages that ChatGPT referenced with the bogus cruise number appear to have been removed, and that it can take time for its information to update "after abusive content is removed at the source."
Meanwhile, the man with the bogus charges has now canceled his credit card, the Post reports, with the charges being reversed. Reflecting on his experience, he tells the Post's readers "I can't believe that I fell for it. Be careful."

EV sales are up 27% for the first seven months of 2025 — for the world. But in America "For the first half of 2025, EV registrations rose 7% to 620,642, with market share inching up just 0.1 percentage point to 7.5 percent," reports Automotive News.

America's new EV registrations were up 4.6% in June (compared to June of 2024), "But EV market share fell for the month and stayed flat for the first half of the year, according to the most recent S&P Global Mobility data." June's 113,460 EV registrations represented 8.6% of U.S. light-vehicle market share, down from 8.8% a year earlier... The data, which serves as a sales proxy since some EV makers don't report U.S. numbers, shows continued flattening of EV market share ahead of the Sept. 30 repeal of the $7,500 federal tax credit.

The S&P Global Mobility numbers include only battery-electric vehicles and not hybrids.
In June Tesla led with 57,260 registrations — more than 6x its next competitor. (Although Tesla's share of the EV segment dropped 6.8% to 43.7 percent in the first half of 2025).

Ranking #2 in June registrations was Chevrolet with 9,517 — a 152% gain over Chevrolet's June 2024 registrations. (Pointing out that the Chevy Equinox EV starts at under $35,000, Electrek writes that "America's most affordable EV with over 315 miles of range, as GM calls it, is quickly winning over buyers.") Automotive News reports Equinox EV registrations surged 722% to 6,239 in June, with Chevy's share of the EV segment more than doubling to 7.7%.

Chevy pulled ahead of Ford (5,759 registrations), Hyundai (5,227 registrations), Rivian (4,613 registrations) and Cadillac (4,121 registrations). Although maybe it's just as interesting that the complete chart shows electric vehicle registrations for 33 different automakers...

Duolingo's stock peaked at $529.05 on May 16th. Three months later, it's down 38% — with that drop starting shortly after backlash to the CEO's promise to make it an "AI-first" company.

Yet "The backlash against Duolingo going 'AI-first' didn't even matter," TechCrunch wrote August 7th, noting Duolingo's stock price surged almost 30% overnight. That surge vanished within two days — and instead of a 30% surge, Duolingo now shows a 5% drop over the last eight days.

Yahoo Finance blames the turnaround on OpenAI's GPT-5 demo, "which demonstrated, among many other things, its ability to create a language-learning tool from a short prompt." OpenAI researcher Yann Dubois asked the model to create an app to help his partner learn French. And in a few minutes GPT-5 churned out several iterations, with flashcards, a progress tracker, and even a simple snake-style game with a French twist, a mouse and cheese variation to learn new vocab....

[Duolingo's] corporate lawyers, of course, did warn against this in its annual 10-K, albeit in boilerplate language. Tucked into the risk factors section, Duolingo notes, "It is possible that a new product could gain rapid scale at the expense of existing brands through harnessing a new technology (such as generative AI)." Consider this another warning to anyone making software. [The article adds later that "Rapid development and fierce competition can leave firms suddenly behind — perceived as under threat, inferior, or obsolete — from every iteration of OpenAI's models and from the moves of other influential AI players..."]

There's also irony in the wild swings. Part of Duolingo's successful quarter stemmed from the business's efficient use of AI. Gross margins, the company said, outperformed management expectations due to lower AI costs. And AI conversational features have become part of the company's learning tools, helping achieve double-digit subscriber growth... But the enthusiasm for AI, which led to the initial stock bump this week, also led to the clawback. AI giveth and taketh away.
Meanwhile, this week a blog announced it was "able to activate a long-rumored Practice feature" hidden in Google Translate, notes PC Magazine, with the blogger even sharing a screen recording of "AI-led features within Translate" showing its ability to create personalized lessons. "Google's take on Duolingo is effectively ready for release," the Android Authority blog concluded. "Furthermore, the fact that a Telegram user spotted this in their app suggests that Google is already testing this in a limited fashion."

Duolingo's CEO revisited the backlash to his original "AI-first" promise today in a new interview today with the New York Times, emphasizing his hope that AI would only reduce the company's use of contractors. "We've never laid off any full-time employees. We don't plan to...." But: In the next five years, people's jobs will probably change. We're seeing it with many of our engineers. They may not be doing some rote tasks anymore. What will probably happen is that one person will be able to accomplish more, rather than having fewer people.

NYT: How are you managing that transition for employees?

Every Friday morning, we have this thing: It's a bad acronym, f-r-A-I-days. I don't know how to pronounce it. Those mornings, we let each team experiment on how to get more efficient to use A.I.
Yesterday there was also a new announcement from attorneys at Pomerantz LLP, which calls itself "the oldest law firm in the world dedicated to representing the rights of defrauded investors."

The firm announced it was investigating "whether Duolingo and certain of its officers and/or directors have engaged in securities fraud or other unlawful business practices."

Sam Altman's brain-chip venture is exploring the idea of genetically altering brain cells to make better implants. "The company, which has been referred to as Merge Labs, is looking at an approach involving gene therapy that would modify brain cells," reports Bloomberg. "In addition, an ultrasound device would be implanted in the head that could detect and modulate activity in the modified cells." From the report: It's one of a handful of ideas and technologies the company has been exploring, they said. The venture is still in early stages and could evolve significantly. "We have not done that deal yet," Altman told journalists at a dinner Thursday in San Francisco, referring to a question about a brain-computer interface venture. "I would like us to." Altman said he wants to be able to think something and have ChatGPT respond to it. [...]

For years, researchers have been studying how to genetically change cells to make them respond to ultrasound, a field called sonogenetics. The idea Merge is considering to combine ultrasound with gene therapy could take years, some of the people said. Ultrasound has attracted significant attention recently as a possible brain therapy. Other companies are exploring the idea of using ultrasound transmitters outside the brain to massage brain tissue, with the goal of treating psychiatric conditions. That kind of technology has shown promise in research studies.

New Zealand citizens leaving the country have hit the highest levels in 13 years, with more than a third of those emigrating aged under 30 years as unemployment rises and economic growth remains soft. From a report: Data released by Statistics New Zealand on Friday showed 71,800 New Zealand citizens departed New Zealand in the year ended June 2025, up from 67,500 in the previous 12-month period and below the record 72,400 in the year ended February 2012. New Zealand's net migration, which is the number of those arriving minus those leaving, also fell with foreign nationals moving to the country of 5.3 million nearly halving from 2024.

An anonymous reader quotes a report from Bloomberg: Beijing has urged local companies to avoid using Nvidia's H20 processors, particularly for government-related purposes, complicating the chipmaker's return to China after the Trump administration reversed an effective US ban on such sales. Over the past few weeks, Chinese authorities have sent notices to a range of firms discouraging use of the less-advanced semiconductors, people familiar with the matter said. The guidance was particularly strong against the use of H20s for any government or national security-related work by state enterprises or private companies, said the people, who asked not to be identified because the information is sensitive. The letters didn't, however, constitute an outright ban on H20 use, according to the people. Industry analysts broadly agree that Chinese companies still covet those chips, which perform quite well in certain crucial AI applications. President Donald Trump said Monday that the processor "still has a market" in the Asian country despite also calling it "obsolete."

Beijing's stance could limit Trump's ability to turn his export control about-face into a windfall for government coffers, a deal that highlighted his administration's transactional approach to national security policies long treated as nonnegotiable. Still, Chinese companies may not be ready to jump ship to local semiconductors. "Chips from domestic manufacturers are improving dramatically in quality, but they might not be as versatile for specific workloads that China's domestic AI industry hopes to focus on," said Homin Lee, a senior macro strategist at Lombard Odier in Singapore. Lee added that he anticipates "strong" demand for the chips the Trump administration is allowing Nvidia and AMD to sell.

Rosenblatt Securities analyst Kevin Cassidy said he doesn't anticipate that Nvidia's processor sales to China will be affected because "Chinese companies are going to want to use the best chips available." Nvidia and AMD's chips are superior to local alternatives, he said. Beijing asked companies about that issue in some of its letters, according to one of the people, posing questions such as why they buy Nvidia H20 chips over local versions, whether that's a necessary choice given domestic options, and whether they've found any security concerns in the Nvidia hardware. The notices coincide with state media reports that cast doubt on the security and reliability of H20 processors. Chinese regulators have raised those concerns directly with Nvidia, which has repeatedly denied that its chips contain such vulnerabilities.

The Financial Times reported that some Chinese companies are planning to decrease orders of Nvidia chips in response to the letters. Right now, the people said, China's most stringent chip guidance is limited to sensitive applications, a situation that bears similarities to the way Beijing restricted Tesla vehicles and Apple iPhones in certain institutions and locations over security concerns. China's government also at one point barred the use of Micron Technology Inc. chips in critical infrastructure. It's possible that Beijing may extend its heavier-handed Nvidia and AMD guidance to a wider range of settings, according to one person with direct knowledge of the deliberations, who said that those conversations are in early stages.