Nvidia Corp. has received approval from the Trump administration to resume sales of its H20 artificial intelligence chips to China, a significant shift in U.S. export policy that drew immediate scrutiny from lawmakers concerned about national security.
Nvidia CEO Jensen Huang announced the breakthrough during a visit to Beijing, telling CGTN on Tuesday, “Today, I’m announcing that the U.S. government has approved for us filing licenses to start shipping H20s.” Huang, in China to attend the International Supply Chain Expo, met with Chinese trade officials and praised the country’s innovation ecosystem. “It’s so innovative and dynamic here in China that it’s really important that American companies are able to compete and serve the market here,” he said.
The announcement follows Huang’s recent White House meeting with President Donald Trump. Nvidia confirmed in a blog post Monday that the U.S. government had “assured” the company that licenses would be granted, and said it “hopes to start deliveries soon.” Shares of Nvidia rose more than 4% in midday trading Tuesday.
U.S. Commerce Secretary Howard Lutnick linked the decision to a broader trade agreement involving rare earth magnets. “We put that in the trade deal with the magnets,” Lutnick told Reuters. While specific details of the deal remain undisclosed, the resumption of chip sales comes just months after Trump initially restricted exports of Nvidia’s H20 and AMD’s MI308 chips to China over national security concerns.
Despite H20 chips being designed to comply with earlier restrictions, some U.S. lawmakers criticized the reversal. “The Trump Administration’s misguided decision to allow Nvidia to resume H20 chip sales to China would not only hand our foreign adversaries our most advanced technologies, but is also dangerously inconsistent,” said Rep. Raja Krishnamoorthi, the ranking Democrat on the House Select Committee on China.
Rep. John Moolenaar, the Republican chair of the same committee, said he would seek “clarification” from the Commerce Department, adding, “It is crucial that the U.S. maintain its lead and keep advanced AI out of the hands of the CCP.”
Nvidia has long warned that continued restrictions could cost the company billions and cede market share to Chinese competitors. In its last fiscal year, Nvidia reported $17 billion in revenue from China-roughly 13% of its total sales. Huang has argued that losing access to Chinese AI developers could jeopardize Nvidia’s global dominance, particularly as Huawei Technologies pushes domestically-produced alternatives.
While the H20 lacks the raw computing power of Nvidia’s top-end GPUs, it retains compatibility with the company’s proprietary software tools-considered essential for modern AI development. Two sources told Reuters that Chinese firms, including ByteDance and Tencent, are rushing to submit applications to purchase the chips. Nvidia has reportedly created an “approved list” system for Chinese clients.
Beijing welcomed the decision. A foreign ministry spokesperson stated, “China is opposed to the politicisation, instrumentalisation and weaponisation of science, technology and economic and trade issues to maliciously blockade and suppress China.”
© 2024 Business Times All rights reserved. Do not reproduce without permission.