Breaking News: US Allows Nvidia to Resume H20 Chips Export to China

The US Commerce Department has started giving Nvidia licenses to export its H20 chips to China. A U.S. official also confirmed this move. This step removes a major obstacle for Nvidia in accessing one of its biggest markets.

The decision follows a reversal of an April ban on selling the H20 chip to China. Nvidia had designed the chip specifically for the Chinese market to comply with strict U.S. export controls introduced during the Biden administration.

The ban had hurt Nvidia’s sales outlook. The company warned that restrictions could cut $8 billion from revenue in its July quarter. In July, Nvidia said it was applying for licenses to resume H20 sales and expected approval soon. Now, at least some licenses have been granted, though it is unclear how many or which Chinese companies can receive the shipments.

Nvidia’s CEO, Jensen Huang, met with former U.S. President Donald Trump on Wednesday, according to two sources. The company declined to comment on the meeting. The White House also did not respond to Reuters’ request for comment.

In April, Nvidia estimated a $5.5 billion charge due to the H20 restrictions. Later, it lowered the estimate by $1 billion after reusing some materials. Despite the restrictions, the H20 generated $4.6 billion in sales in the first quarter. China accounted for 12.5% of Nvidia’s revenue in that period.

See Also: Nvidia and AMD to Restart AI Chips Sales to China After US Approval

The H20 is one of the few advanced AI chips that Nvidia can now export to China. Other high-end models remain restricted. U.S. administrations have kept such limits in place to slow China’s AI and defence development.

Nvidia has assured that the H20 has no “backdoors” for remote access, addressing China’s security concerns. But competition in the Chinese market is heating up. Huawei is reportedly courting developers with chips made in China.

China is one of the world’s largest semiconductor markets. Even with restrictions, it remains a vital revenue source for American chipmakers. Huang has warned that without sales to China, Nvidia’s lead in the AI chip market could be at risk.

The Financial Times first reported news of the license approvals on Friday. While exports of other advanced AI chips to China remain limited, the approval for the H20 gives Nvidia a way to keep part of its business in the country alive.