In a striking policy reversal, the US government has lifted restrictions on the sale of Nvidia’s H20 AI chips to China, marking a significant shift in Washington’s approach to technology export controls.
What’s Changed
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Policy U-turn: The US had previously barred Nvidia from selling its H20 chips to China in April. Now, the government has approved resuming exports. Nvidia has confirmed that license requests will be approved soon.
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Catalyst meeting: The reversal follows a key meeting between Nvidia CEO Jensen Huang and former President Donald Trump. Huang is currently in Beijing for a supply‑chain expo and is expected to speak publicly on the matter.
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New compliant chip: Nvidia has also introduced a new AI chip based on its Blackwell architecture, designed specifically for China. This chip complies with US export regulations and targets industrial sectors like smart manufacturing and logistics.
Financial Impact
Nvidia reported a $5.5 billion inventory write-down and lost up to $15 billion in revenue due to the earlier restrictions. With China contributing around 13% of its annual revenue (approximately $17 billion), the resumed chip sales could significantly offset those losses.
Strategic Context
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US–China negotiations: This development reflects a broader easing in trade tensions. China recently lifted curbs on rare-earth exports, and the US has reciprocated by allowing certain chip-design tools back into Chinese markets.
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Security vs. competitiveness: While some US lawmakers expressed concern about advanced chips being used in China’s military AI development, Nvidia’s CEO argued that restricting access may encourage China to fast-track its own AI chip innovations—potentially weakening the US’s global tech position.
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Global AI race: Huang emphasized during the China expo that nearly half of the world’s AI developers are based in China, reinforcing the importance of collaboration over isolation in AI development.
What’s Next
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Licensing: Nvidia will soon apply for licenses under the new export rules and anticipates beginning deliveries shortly.
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Monitoring: The US government will continue to evaluate the situation and could reintroduce restrictions if geopolitical tensions escalate.