Nvidia Corporation (NASDAQ:NVDA) has informed Chinese clients that it has limited inventory of its H20 chip—the most advanced AI processor it is currently permitted to sell in China—according to a report by The Information. Despite recent talks of resuming H20 shipments, Nvidia has told customers it does not plan to restart production of the chip for now.
Last week, Nvidia said the U.S. government would issue new licenses to allow H20 sales to China, but official confirmation from Washington remains pending. The company’s caution comes amid ongoing U.S.-China trade tensions, which have heavily impacted the semiconductor sector.
Previously, Nvidia had been allowed to export the H20 to China under Biden-era regulations. However, the Trump administration imposed tighter restrictions earlier this year, targeting the export of advanced AI chips amid national security concerns. These curbs came as part of a broader tech-related trade conflict with Beijing.
Recent diplomatic efforts through May and June saw both nations attempt to ease tensions. China resumed rare earth exports to the U.S., while Washington slightly relaxed export rules on chip design tools. Still, the fate of the H20 remains uncertain as Nvidia awaits formal license approval.
The H20 chip is crucial to China’s AI ambitions and is used by major Chinese tech firms such as Alibaba (NYSE:BABA), Tencent, Baidu (NASDAQ:BIDU), ByteDance, and DeepSeek. These companies rely on advanced processors to power AI models and maintain competitiveness in the global tech race.
With supply constraints and regulatory uncertainty, Nvidia’s limited H20 availability could pose a challenge to China’s artificial intelligence development, while also highlighting the ongoing geopolitical risks faced by the semiconductor industry.