Nvidia Resumes H20 Chip Sales to China Amid US Policy Shift, Reversing Prior Ban

Nvidia, a leading American chipmaker, is set to resume sales of its H20 artificial intelligence (AI) chips to China, following assurances from the U.S. government that necessary export licenses will be granted. This development marks a significant reversal of a previous ban imposed in April 2025 by the Trump administration, which had cited national security concerns regarding the chips' potential use by the Chinese military. The decision comes amidst ongoing trade negotiations between Washington and Beijing, aiming to balance economic interests with strategic technology control.

The H20 chip was specifically engineered by Nvidia to comply with earlier U.S. export restrictions targeting China's access to advanced AI technology. However, its sale was subsequently blocked, leading to substantial financial setbacks for Nvidia, with estimated revenue losses ranging from $5.5 billion to $15 billion. The company's CEO, Jensen Huang, has been a vocal critic of these controls, arguing they impede U.S. competitiveness in a crucial global market.

Mr. Huang recently met with U.S. policymakers, including President Donald Trump, to advocate for the resumption of sales. He has publicly stated that the Chinese military "don't need Nvidia's chips" and "can't rely on" U.S. technology due to the risk of future restrictions. Despite this, U.S. lawmakers have expressed bipartisan concerns, highlighting reports that Chinese military bodies and AI research institutes have previously acquired banned Nvidia chips, underscoring difficulties in enforcing export controls.

This policy shift is part of a broader easing of U.S.-China trade tensions, which has also seen Beijing relax controls on rare earth exports. As noted by analyst Velina Tchakarova on social media,

"Chinese military has been buying high-end computer chips designed by American companies like Nvidia to power its next-generation weapon systems. This has been long known but things are heating up now." The ongoing debate reflects the complex choices facing companies like Nvidia, navigating national security priorities and significant market opportunities in China, which accounts for 50% of the world's AI researchers.

Nvidia, which recently achieved a $4 trillion market valuation, views China as a critical market, contributing 13% ($17 billion) to its total sales in fiscal year 2024. The resumption of H20 shipments is expected to alleviate some of the financial pressures on the company and allow it to better serve China's burgeoning AI sector. Rival chipmaker AMD has also announced plans to resume shipments of its MI308 AI chips to China, signaling a wider trend in the semiconductor industry.