Nvidia Resumes AI Chip Sales to China Amid U.S. Policy Shift

Nvidia announced on July 15, 2025, that it will resume sales of its H20 artificial intelligence (AI) chips to China, following assurances from the U.S. government that export licenses will be granted. This decision marks a significant shift in U.S. policy and is expected to ease tech trade tensions between the two nations.

The H20 chip, specifically designed to comply with U.S. export controls, is a less powerful version of Nvidia's top-tier semiconductors. Despite its reduced capabilities, the H20 has been highly sought after in the Chinese market due to its compatibility with Nvidia's CUDA software platform. Major Chinese tech companies, including ByteDance and Tencent, have expressed interest in purchasing these chips.

In April 2025, the U.S. government informed Nvidia that the H20 chip would require an export license, effectively halting its sales to China. This restriction led to a projected $5.5 billion loss for Nvidia due to unsold inventory and unfulfilled orders. Nvidia CEO Jensen Huang emphasized the importance of the Chinese market, noting that China accounted for $17 billion, or 13% of Nvidia’s total sales in the last fiscal year.

The resumption of H20 chip sales is reportedly linked to a broader trade agreement involving rare earth magnets, with the U.S. asserting that it is still withholding its most advanced technology. Following the announcement, Nvidia's stock price rose by 4% to $170.22, reflecting investor optimism about the company's re-entry into the Chinese market.

Competitor AMD also plans to resume exports of its MI308 chips to China, pending U.S. government approval, signaling a potential easing of tech trade restrictions for multiple companies.

The resumption of H20 chip sales to China could have several implications:

• Technological Collaboration: Eased restrictions may foster increased collaboration between U.S. and Chinese tech companies, potentially leading to joint innovations and advancements in AI technology.

• Economic Impact: For Nvidia, re-entering the Chinese market could recover significant revenue losses and strengthen its global market position.

• Geopolitical Dynamics: This development may signal a thaw in U.S.-China tech trade tensions, potentially influencing future diplomatic and economic relations between the two nations.

Nvidia's resumption of H20 AI chip sales to China, facilitated by a shift in U.S. export policy, underscores the complex interplay between national security concerns and economic interests in the global tech industry. As the situation evolves, stakeholders will closely monitor the implications for international trade relations and the competitive landscape of AI technology.