Nvidia to Resume AI Chip Sales in China: Trump-Huang Meeting Signals De-escalation of Trade Tensions

US chipmaker Nvidia has announced plans to resume sales of its H20 artificial intelligence (AI) chips in China. This announcement comes just days after Nvidia's CEO met with US President Donald Trump in Beijing.

The primary aim of US export controls was to prevent advanced AI chips from reaching the Chinese military, a concern for national security. These restrictions had previously led to a forecasted $15 billion revenue loss for Nvidia.

The world's most valuable technology company stated in a release that it is applying to the US government to resume sales of its H20 Graphics Processing Unit (GPU) in China and expects to receive the license soon. Nvidia said, "The US government has assured Nvidia that licenses will be granted, and Nvidia expects to begin shipments promptly."

Nvidia had previously criticized the export restrictions imposed by the Trump administration in April, which prevented the H20 chip from being sold in China. The company also stated that it has developed a new model to meet the regulatory requirements of the Chinese market. The White House did not immediately comment on the matter.

The US government has long expressed concerns that the Chinese military could use AI chips to develop weapons.

Nvidia CEO Jensen Huang will hold a press conference at a supply chain expo in Beijing on Wednesday (July 16). This marks his second visit to China since April, where he emphasized the importance of the Chinese market.

Speaking to Chinese state broadcaster CCTV on Tuesday (July 15), Huang said, "The Chinese market is huge, dynamic, and highly innovative, and it's home to many AI researchers. So, it's really critically important for American companies to establish themselves in the Chinese market."

Nvidia faces increasing competition from Chinese tech giant Huawei and other graphics processing unit (GPU) manufacturers, which are used in AI training. However, Chinese companies, including their major tech firms, are still interested in Nvidia's chips due to its computing platform called CUDA.

Huang's visit is being closely watched in both China and the United States. Last week, a bipartisan group of senators sent a letter to Huang, requesting him not to meet with companies that work with military or intelligence agencies. The senators also urged Huang not to meet with entities on the US's restricted export list.

This move to resume H20 chip sales indicates a de-escalation of tensions between Washington and Beijing. China has eased export controls on rare earth minerals, and the US has permitted the resumption of chip design software services in China.

However, He Hui, a semiconductor research director at Omdia, said, "Uncertainty remains high between the US and China, and despite the pause in H20 restrictions, Chinese companies will continue to diversify their options to better protect the integrity of their supply chains."

The H20 chip was specifically designed for the Chinese market after US export restrictions were imposed in late 2023. This AI chip was Nvidia's most powerful legally available product in China until Washington effectively banned it in April.

The H20 ban forced Nvidia to write off $5.5 billion in inventory, and Huang told the Strategery podcast earlier this year that the company had to forgo $15 billion in sales.

Nvidia has also announced the development of a new AI chip specifically designed for the Chinese market, the RTX Pro GPU. The company describes this model as "fully compliant" with US export controls and suitable for digital twin AI applications in sectors like smart factories and logistics.

In May, Reuters reported that Nvidia was preparing to launch a new AI chip in China, based on the RTX Pro 6000D, at a significantly lower price than the H20. Sources indicated that this GPU would be part of Nvidia's latest-generation Blackwell-architecture AI processors, and due to its weaker specifications and simpler manufacturing requirements, its price is expected to be much lower than that of the H20.

According to Nvidia's latest annual report, revenue from China was $17 billion for the fiscal year ending May 30, 2024, accounting for 13% of the company's total sales. Huang has consistently highlighted China as a critical market for Nvidia's growth.