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Nvidia Prepares to Resume H20 Chip Sales to China Amid Shifting U.S. Export Policy

Nvidia is gearing up to resume sales of its high-performance H20 AI chips to China, marking a potential turning point in the tech standoff between the United States and Beijing. On Tuesday, the company announced that it is actively filing applications with the U.S. Department of Commerce for export licenses and has received encouraging signals from the government that approvals will be granted soon.

This development follows several months of halted shipments due to tightened U.S. export controls on advanced semiconductors, a policy aimed at restricting China’s access to leading-edge AI technology. The H20 chips — a customized version of Nvidia's powerful AI GPUs — were specifically engineered to comply with earlier rounds of U.S. export restrictions. However, in April, the Biden administration reclassified the chips under more stringent controls, effectively blocking their sale.

A Crucial Win After Market Setbacks in China

For Nvidia, which dominates the global market for AI chips, regaining access to China — the world’s second-largest economy — is a critical win. According to CEO Jensen Huang, the export restrictions had slashed Nvidia’s market share in China by nearly 50%.

“China remains a strategic market for Nvidia, and the resumption of H20 shipments allows us to serve our partners and clients more effectively,” the company said in its latest statement.

Nvidia’s total revenue from China fell dramatically after the original U.S. export restrictions went into effect in late 2022. In Q1 FY2024, the company generated about 19% of its total revenue from China, down from over 30% the previous year.

High-Level Diplomacy Behind the Policy Shift

The renewed hope for chip exports comes on the heels of a private meeting between Nvidia CEO Jensen Huang and former U.S. President Donald Trump. During the conversation, Huang reportedly emphasized the company’s support for domestic job creation, manufacturing onshoring, and maintaining America’s technological dominance in artificial intelligence.

This diplomatic shift aligns with recent signals of cooperation between Washington and Beijing. In June, both countries agreed on a preliminary trade framework to ease bilateral tensions. This included a mutual understanding around rare-earth exports and a reconsideration of high-tech trade curbs.

According to administration officials familiar with the matter, the new guidance on export licenses aims to balance national security concerns with commercial competitiveness, particularly for U.S. firms that risk losing global market share.

Nvidia’s Next Moves in China’s AI Ecosystem

In anticipation of prolonged regulatory uncertainty, Nvidia had been developing a new, less advanced AI chip specifically for the Chinese market. Though details remain limited, insiders suggest this alternative chip — possibly named “RTX PRO” — would remain compliant with existing export controls while still serving industrial applications such as smart manufacturing and logistics.

“The lifting of the H20 ban marks a significant and positive development for Nvidia, which will enable the company to reinforce its leadership in China,” said Ray Wang, Principal Analyst at Futurum Research. “The resumption of H20 shipments — alongside the upcoming rollout of new export-compliant chips — should serve as a fresh growth catalyst in the coming quarters.”

The H20 is part of Nvidia's Hopper architecture series, designed to accelerate AI model training and inference, especially for large language models and generative AI. In benchmark tests, the H20 reportedly delivered up to 90% of the performance of Nvidia’s more advanced chips like the H100 — but at a price point and configuration that would have allowed it to legally ship to China before April's updated restrictions.

CEO Huang’s Visit to China: Strengthening Ties on the Ground

Meanwhile, Nvidia confirmed that CEO Jensen Huang is currently visiting China, where he has been meeting with top government officials, research institutions, and industrial leaders. The focus of his discussions has been on the role of AI in driving national development and exploring frameworks for secure, ethical AI innovation.

The visit is seen as a strategic move to reinforce Nvidia’s commitment to the Chinese market at a time when tech collaboration is delicately balanced with geopolitics.

Final Thoughts

Nvidia’s near-term future in China had been hanging by a thread, with billions in potential revenue on the line. But with fresh momentum from Washington and continued engagement in Beijing, the green light to resume H20 chip shipments could not only revitalize Nvidia’s market position but also signal a broader thaw in U.S.-China tech relations.

While regulatory hurdles still exist, the developments around the H20 chip demonstrate how diplomatic and commercial strategy now intertwine closely in the semiconductor race.