China Urges Firms Not to Use Nvidia H20 Chips; Trump Extends China Truce for 90 Days

0:00Bloomberg Daybreak U.S. edition is brought to you by OTC Markets Group. OTC Markets' overnight platform for exchange-listed securities, Moon ATS, provides access to global securities in U.S. dollars from 8 p.m. to 4 a.m. Eastern, Sunday through Thursday. Learn more at otcmarkets.com slash moon. Moon ATS is operated by OTC Link LLC, a FINRA-registered broker-dealer, and is available only through participating broker-dealers. The thing about AI for business, it may not automatically fit the way your business works. At IBM, we've seen this firsthand. But by embedding AI across HR, IT, and procurement processes, we've reduced costs by millions, slash repetitive tasks, and freed thousands of hours for strategic work.

0:47Now we're helping companies get smarter by putting AI where it actually pays off, deep in the work that moves the business. Let's create smarter business, IBM. When you're running a business, the best days are the ones where priorities stay on track. For midsize and large companies, risk can affect multiple parts of the organization at once, from property and liability to cyber and regulatory challenges. At that level, managing risk becomes an ongoing discipline. At the Hartford, the focus is on helping businesses manage risk before it turns into something more disruptive. And when losses do happen, that work is paired with insurance coverage shaped by years of underwriting, risk engineering, and claims experience.

1:28Learn more at thehartford.com slash risk mitigation. Policy is provided by Hartford Fire Insurance Company and its property and casualty affiliates, Hartford, Connecticut. Bloomberg Audio Studios. Podcasts. Radio. News. Good morning. I'm Nathan Hager. And I'm Karen Moscow. Here are the stories we're following today. Karen, we begin with a Bloomberg News exclusive. Sources tell Bloomberg News that Chinese authorities are discouraging local firms from using NVIDIA's less advanced H20 processor, particularly for government-related purposes. We're told the directive also includes AI accelerators from advanced micro devices, though it's unclear whether the notices specifically mention AMD.

2:14We get more from Bloomberg's Min Min Lo in Hong Kong. Definitely very significant. The timing as well, very significant. Coming on the day when President Trump had announced the extension of the trade truce. And we know China had been pushing so hard for the rolling back of these tech curbs. And clearly, China doesn't see the reversal of the decision to sell H20 chips to China as a win or a concession at all. Bloomberg's Min Min Lo reports Chinese regulators have raised security concerns about NVIDIA's H20 chip. NVIDIA has repeatedly denied any vulnerabilities. But checking the shares right now, NVIDIA is down about four-tenths of one percent pre-market.

2:53Advanced micro-devices is little changed. Well, Nathan, elsewhere in U.S.-China relations, Washington and Beijing have agreed to keep their tariffs at current levels for another 90 days. The two sides initially reached a 90-day pause in May. The extension that lasts until November 10th maintains this trade status quo between the world's two largest economies and follows a series of tit-for-tat hikes and export restrictions on rare earth magnets and certain technologies. Wendy Cutler, vice president of the Asia Society Policy Institute, says even with the extension, negotiations will not be easy.

3:27There's not a lot of time for these negotiations to proceed. So now they can really put their energies and attention on the key outstanding issues, including export controls, critical minerals, excess capacity, you name it. There's lots of issues on the agenda and not a lot of time to come up with negotiated solutions. Wendy Cutler with the Asia Society Policy Institute spoke after President Trump announced the extension of the truce in a truth social post. Well, another announcement from the president that's getting a lot of attention in the nation's capital, Karen, is he plans to take federal control of the police department in Washington, D.C.

4:06The president said that in a news conference heard right here on Bloomberg Radio, saying he'll also deploy 800 National Guard troops in the district to fight crime. Today we're declaring public safety emergency in the District of Columbia. Attorney General Pam Bondi, who's fantastic, is taking command of the Metropolitan Police Department as of this moment. And I'll be making the appropriate notifications to Congress. President Trump also threatened to insert federal personnel into other cities, including New York and Chicago, if they don't crack down on, quote, out of control crime. D.C. Mayor Muriel Bowser is responding, saying the president's announcements were, in her words, unsettling and unprecedented.

4:48I can't say that given some of the rhetoric of the past that we're totally surprised. That's D.C. Mayor Muriel Bowser. Justice Department statistics show violent crime in the nation's capital hit a 30-year low in 2024. While staying in D.C., Nathan, President Trump named E.J. Antony an economist with the conservative think tank The Heritage Foundation as the new head of the U.S. Bureau of Labor Statistics. The president dismissed the previous chief following a weak jobs report that included several revisions. The president claimed the report was rigged against him. President Trump is promising future data releases will be, quote, honest and accurate.

5:26Bloomberg's senior editor, Derek Wahlbank, says the faith in U.S. economic data remains uncertain. Antony will be under an exorbitant amount of pressure to prove to lawmakers and to prove to economists and to market participants that the BLS numbers are accurate, they were accurate, and they will be accurate. Bloomberg senior editor Derek Wahlbank adding that Anthony will still need to be confirmed in the position by the Senate. Of course, another Senate confirmable position that's opening up, Karen, is the Federal Reserve chair. And two Trump administration officials tell Bloomberg News Fed vice chairs Michelle Bowman and Philip Jefferson, along with Dallas Fed President Lori Logan, are under consideration for the job when Jay Powell's term expires next spring.

6:11The officials say Treasury Secretary Scott Bessent will interview additional candidates in the coming weeks and make a recommendation to President Trump on a short list. The Fed's next policy meeting, scheduled for September 16th and 17th. And ahead of that policy meeting, Nathan, the Fed will get a slew of economic data this week, including the first of two inflation reports this morning due out at 830 Wall Street time. Bloomberg's Michael McKee joins us with a preview of the July Consumer Price Index. This inflation report is one that should live up to the hype. The weak jobs report August 1st convinced investors the Fed will cut rates in September, but that will require inflation remaining relatively benign.

6:51A small increase today should open the door for a cut, although there's another CPI report before the next Fed meeting. A bigger tariff-driven increase would make a cut that much more problematic. Watch to see if annual core inflation breaches the 3 percent mark. Michael McKee, Bloomberg Radio. Our Mike thanks. Another economic news. Gold held a loss after President Trump said imports of gold bars won't be subject to tariffs. That was after Customs and Border Protection ruled they would be. Gold has climbed more than a quarter this year, supported by geopolitical and trade tensions, along with central bank purchases.

7:24Comex Gold this morning is down two-tenths of one percent, trading at$3 ,399 an ounce. Nathan, President Trump is downplaying his meeting with Russian President Vladimir Putin scheduled for Friday in Alaska. The president says it's a feel-out meeting and that he'd speak with other world leaders afterwards as he seeks a ceasefire in the war in Ukraine. Ukraine's President Volodymyr Zelensky has not been invited to the summit and says he's skeptical about the Kremlin's motives. Putin is determined only to present a meeting with America as his personal victory and then continue acting exactly as before, applying the same pressure on Ukraine as before.

8:02So far, there is no indication whatsoever that the Russians have received signals to prepare for a post-war situation. Vladimir Zelensky, speaking through an interpreter, Ukraine and its European allies have been pushing for a halt to the fighting and freezing the current front line as a first step before talks and a more enduring settlement. And back in Washington, Karen, Treasury Secretary Scott Besson says he thinks he could have made the markets react more positively to President Trump's Liberation Day tariff announcement. In an exclusive interview, Bloomberg Businessweek looks at how the Treasury Secretary has become the Trump cabinet member that Wall Street trusts.

8:38And we get more from Bloomberg's Jeff Bellinger. Many traders look to Scott Besant as a moderator, someone who reigns in the White House's impulses. But the Treasury Secretary tells Bloomberg Businessweek he merely advises President Trump, helping him translate his populism into economic policy. The modest approach can't hide that Besant has been tapped to take on some of the most difficult assignments of Trump's second term. But despite being the favorite on Wall Street, one area the Treasury Secretary has not yet managed to grip is the U.S. fiscal deficit, which he campaigned on getting down to 3%, but is now set to grow after blockbuster tax cuts.

9:17In New York, Jeff Bellinger, Bloomberg Radio. All right, Jeff, thank you. In our interview with Treasury Secretary Scott Bessent is the cover story of the latest edition of Bloomberg Business Week. You can check it out in today's Bloomberg Big Take. It's on the Bloomberg Terminal and at Bloomberg.com.

9:35Time now for a look at some of the other stories making news in New York and around the world. And for that, we're joined by Bloomberg's Michael Barr. Michael, good morning. Good morning, Karen. A federal judge in New York says transcripts of the secret grand jury testimony that led to the sex trafficking indictment of Jeffrey Epstein's former girlfriend, Ghislaine Maxwell, should not be released. The judge suggested Monday the Justice Department's real motive for wanting the transcripts unsealed was to fool the public with an illusion of transparency. Maxwell is serving a 20-year prison term.

10:08Maxwell recently was interviewed by the Justice Department and was moved from a prison in Florida to a prison camp in Texas. Epstein died in jail awaiting trial. An explosion at a U.S. steel plant that shook the ground near Pittsburgh left two dead and sent at least ten to hospitals. An Allegheny County spokesperson says an explosion followed by several smaller blasts happened Monday morning at the Claritin Coke Works. U.S. Steel's Kurt Barshik. The rest of the plant is stable and secure, so there's no additional impact as far as any gas or utilities. U.S. Steel's Kurt Barshik. Authorities say they are done with the recovery phase of the operation and will now start the investigation into what caused the blast.

10:59Police in Austin, Texas say a suspect is in custody after opening fire outside a Target store Monday afternoon, killing three people. Police say they spotted the suspect as he hijacked a car and then drove away. He crashed less than two miles down the road, ditched that car, and then hijacked another vehicle. Police chased him to South Austin. They finally caught up with him, tased him, and arrested him. Today and tomorrow, some Americans might be able to witness one of the most active meteor showers of the year. The Perseid meteor shower will peak for North America specifically early Wednesday.

11:36But the American Meteor Society warns a particular bright moon might make it hard for it to see. Derek Pitts is the chief astronomer at the Franklin Institute. It can show us as many as 100 meteors per hour if we go outside and take a look at the night sky under clear dark skies. Astronomer Derek Pitts. Global News 24 hours a day and whenever you want it with Bloomberg News Now. I'm Michael Barr and this is Bloomberg, Karen. All right, Michael Barr, thank you.

12:09Time now for the Bloomberg Sports Update brought to you by Flushing Bank. And here is John Stashauer. John, good morning. Morning, Karen. Just what the Yankees needed when in need of a win. A visit from the Minnesota Twins, who the Yanks have been dominating seemingly forever. In fact, since 2002, the Yanks, against the Twins, 124 wins, 44 losses. They used a long ball at the stadium. Cody Bellinger homer in the first inning. John Carlos Stanton and Ben Rice back-to-back in the third. Jazz Chisholm in the eighth. All four homers solo shots. Solid pitching from Will Warren the rare time when a Yankee starter actually worked into the seventh inning.

12:45and the Yanks won 6-2. Red Sox lost 7-6 in Houston. It was Alex Bregman's first game back where he played for nine years and he homered in the first inning. The Phillies won 4-1 at Cincinnati to go six games ahead of the Mets who are at Citi Field tonight against Atlanta. After getting swept in Milwaukee, Carlos Mendoza sounded like the manager of a team with a seven-game losing streak. Like you're saying, we got the talent, we got the players, but until we start playing better and getting the job done, we continue to believe in the guys. And we will. You know, he's tough. I know he's tough right now.

13:18He's very frustrating. We're all very frustrated, you know. But you've got to keep going. As for those red-hot brewers, a tenth win in a row, 7-1 over Pittsburgh. First time ever, the Texas Longhorns will begin a season ranked number one, but in another first, they'll be an underdog in their season opener at Ohio State, who in the AP preseason poll is ranked third, just behind Penn State. Buckeyes are second in the coaches poll. Third round tennis in Cincinnati wins for top seed Yannick Sinner and Americans Taylor Fritz and Francis Tiafoe. Tommy Paul lost. Women's top seed Irina Stabilenka beat Emma Eratikano in a third set tiebreak.

13:53She's won her last 16 tiebreak. Josh Dashauer, Bloomberg Sports, Karen Nathan. Stay with us. More from Bloomberg Daybreak coming up after this. Bloomberg Daybreak U.S. Edition is brought to you by OTC Markets Group. Thinking about joining the exploding overnight market space but unsure where to start? Designed to meet the needs of a growing international investor base, OTC Markets' overnight platform for exchange-listed securities, Moon ATS, provides access to global securities in U.S. dollars from 8 p.m. to 4 a.m. Eastern, Sunday through Thursday. Extend your trading day and trade global securities in U.S.

14:30dollars through a FINRA-licensed broker-dealer. In the first half of 2026, over$28.1 billion U.S. dollars traded on Moon ATS. Learn more about Moon ATS. Visit otcmarkets.com slash moon. Moon ATS is operated by OTC Link LLC, a FINRA-registered broker-dealer. This is the Bloomberg Tech Minute brought to you by ChatGPT. Now with ChatGPT Work, I'm Carol Masser. DoorDash, the largest food delivery company in the U.S., is building its own delivery drones and has gained the necessary FAA approvals to operate them commercially. The latest in its effort to delegate more orders to robots as a way of cutting delivery times.

15:15Bloomberg's Natalie Lung reports the company says it has been conducting pilot programs with various restaurants, some of which have seen their order volume grow during the test period. The effort marks an expansion of DoorDash's in-house robotics efforts to reduce reliance on human couriers for some orders, as their wages constitute a key expense to the business. Drones are also a way for DoorDash to cut delivery times on orders from more remote locations that some dashers may not want. That's the Bloomberg Tech Minute brought to you by ChatGPT. Put ChatGPT to work on your most ambitious ideas and projects.

15:50Get started at ChatGPT.com today by selecting work mode, available on Plus and Pro plans. It's time to plan ahead and make sure your brand is showing up in ways that can have an impact. That's where 4imprint comes in. 4imprint have promotional products that work as hard as you do. Durable, useful, and designed to make a lasting impression. Think quality apparel your team will wear again and again, including popular and exclusive brands. Drinkware that's enjoyed again and again. Bags, notebooks, tools, and tech items that don't just look good, but actually get used. With thousands of customizable options, 4imprint makes it easy to find what fits your brand and your budget.

16:32You'll get expert help, free samples, and their 360-degree guarantee means you can be 4imprint certain your order shows up just right, right on time. Whether you're gearing up for fall events or simply planning ahead for the season, 4imprint can help your brand show up, stay useful, and make connections that last. Explore the possibilities at 4imprint.com. 4imprint. 4certain.

16:57Coast to coast on Bloomberg Radio. nationwide on SiriusXM and around the world on Bloomberg.com and the Bloomberg Business App. This is Bloomberg Daybreak. Good morning. I'm Nathan Hager. Well, the tariff truce between the U.S. and China may be extended another 90 days, but plenty of tension points remain, not the least of which is access to U.S. chips. And Bloomberg News has learned China is now urging its local companies to avoid using NVIDIA's H20 processor, just as the Trump administration has been pushing to turn sales of those chips in China into a government windfall. For more on this, we're joined by Bloomberg's Kriti Gupta.

17:31Kriti, good morning. What more do we know about this reported directive from the Chinese government? Well, Nathan, good morning. This is an ongoing issue and one that has been a source of tension between the United States and China for some time. What we do know is that there were letters that were not really a directive, but more of guidance by some of the regulators and the authorities in China towards not only various government departments that may have a dependence on these kind of chips, but also smaller businesses as well that may be looking to grow and grow their dependence specifically on those American chips.

18:04Again, these were letters deployed a couple of months ago that have now kind of made it to the surface. But I think it speaks to this broader point of the U.S. and China and not only the trade tensions, but also how competitive China can be when it comes to not only the chip space, but the A.I. space as well. And this is something that a theme that we explored earlier this year with the deep seek conversation where suddenly the market got very scared of the idea that actually there could be an alternate offering from China. And that's exactly where the fear lies when it comes to these H20 chips and NVIDIA in that if you start to lower your dependence from China, which is a major kind of revenue contributor for NVIDIA's bottom line, does that mean China has an alternative?

18:49And that's really the question that's circulating at the moment. And of course, this comes at a time, Critty, when NVIDIA has openly said they're trying to recoup billions in revenue that they've lost in the Chinese market. They are really trying to get back into that market. What could this mean for NVIDIA and AMD if this guidance goes through for them? Well, for a context for a global audience, 95 percent of the market is dominated by NVIDIA. The other 5 percent is about AMD and the remaining players have a marginal kind of piece of that pie. And what it means is that on Friday, we had heard that NVIDIA had gotten those export licenses with the caveat of having to pay the 15 percent revenues right back to the U.S.

19:32government. So it's very clear that they do need that exposure. And Jensen Wong has been quite vocal about his desire to not just be someone that caters to one market or another, not just catering to the hyperscalers, the Apples, the Microsofts, the kind of biggest tech players of the world, but really diversifying into a variety of industries. things like medical equipment, things like smaller companies that really need to not only use the chips, but are able to kind of help with NVIDIA's revenue basis. Well, we are not there yet. And that's where NVIDIA really finds a little bit of vulnerability when it comes to the Chinese market.

20:05Ultimately, the 15 percent they're going to have to pay for the U.S. government. I thought another key piece of this is we've been talking about the H20 chip, which is kind of a watered down version that has been specifically created under the Biden administration, by the way, to cater to a Chinese customer, but isn't really using as high tech of the technology for, again, Chinese military, Chinese technology, etc. etc. NVIDIA's Blackwell chip is the far superior technology. And now it looks like Donald Trump is thinking about how to kind of utilize that American technology and where it needs to be protected and where it needs to be deployed.

20:40So that's another angle to be thinking about for NVIDIA. This is Bloomberg Daybreak, your morning podcast on the stories making news from Wall Street to Washington and beyond. Look for us on your podcast feed by 6 a.m. Eastern each morning on Apple, Spotify, or anywhere else you listen. You can also listen live each morning starting at 5 a.m. Wall Street time on Bloomberg 1130 in New York, Bloomberg 99.1 in Washington, Bloomberg 92.9 in Boston, and nationwide on Sirius XM Channel 121. Plus, listen coast-to-coast on the Bloomberg Business app now with Apple CarPlay and Android Auto interfaces. And don't forget to subscribe to Bloomberg News Now.

21:21It's the latest news whenever you want it, in five minutes or less. Search Bloomberg News Now on your favorite podcast platform to stay informed all day long. I'm Karen Moscow. And I'm Nathan Hager. Join us again tomorrow morning for all the news you need to start your day right here on Bloomberg Daybreak.

21:47It's time to plan ahead and make sure your brand is showing up in ways that can have an impact. 4imprint's promotional products are designed to work as hard as you do and make a lasting impression. From quality apparel, including exclusive brands, to drinkware, tech, and totes, they've got thousands of options to fit your brand and budget. Plus, you get free samples, expert help, and their 360-degree guarantee. So you can be 4imprint certain everything shows up just right, right on time. Explore more at 4imprint.com. 4imprint. 4certain. Healthcare doesn't always work great. If you've ever waited on a refill or couldn't schedule an appointment, you get it.

22:26That's the kind of stuff Optum is changing. They're using data and technology to integrate patient care, pharmacy, and everything else. So healthcare is connected, not complicated. What's that look like? Cheaper prescriptions that are easier to get and care that looks at the whole person how you need it. Optum is helping make healthcare work as one for everyone. Learn more at business.optum.com. As industries evolve faster than ever, companies need an environment that accelerates strategic growth, and Michigan delivers on that promise. From emerging startups to global enterprises, Michigan offers what executives value most, a resilient, innovative ecosystem, diverse communities that attract top talent, and a quality of life that supports work-life balance.

23:09With our unified Team Michigan approach, businesses scale faster and compete at the highest level. Michigan, pure opportunity. Seize your opportunity at michiganbusiness.org.