US Licenses Nvidia H20 Chip Exports to China
The U.S. Commerce Department has begun issuing licenses to Nvidia, permitting the export of its H20 artificial intelligence chips to China. This move signals a significant easing of restrictions for the leading AI chipmaker, allowing it access to a critical market after Washington had effectively banned the H20 in April.
The H20 microprocessor was specifically designed by Nvidia for the Chinese market to comply with existing Biden-era AI chip export controls, which aim to curb Beijing’s advancements in AI and defense technologies. Despite its tailored design, the chip was caught in a renewed wave of restrictions earlier this year. Nvidia had previously warned that such curbs could slice billions from its sales, including an estimated $8 billion from its July quarter alone, though it managed to mitigate some impact, reporting a $4.5 billion charge in the first quarter related to restrictions, a billion less than initially projected, by reusing materials.
Following the April ban, Nvidia had actively sought a reversal, filing applications with the U.S. government and receiving assurances that licenses would be granted soon. The company had also publicly addressed concerns from China regarding potential security risks, asserting that its products contain no “backdoors” that would allow remote access or control. While the H20 is now permitted, exports of Nvidia’s other, more advanced AI chips to China remain restricted, underscoring a continued strategic effort by the U.S. to limit certain technological transfers.
China represents one of the world’s largest semiconductor markets and remains a vital revenue driver for American chipmakers, despite ongoing export curbs. Nvidia CEO Jensen Huang has emphasized the importance of the Chinese market, warning that the company’s global leadership position could be jeopardized without sales there, especially as domestic competitors like Huawei Technologies aggressively court developers with their own China-produced chips. The H20 itself had previously generated substantial revenue, contributing $4.6 billion in sales during the first quarter, with China accounting for 12.5% of Nvidia’s overall revenue in that period.
The extent of the newly issued licenses, including the specific companies allowed to receive H20 shipments and the total value of these exports, remains undisclosed. The development, first reported by the Financial Times, also follows a recent meeting between Nvidia CEO Jensen Huang and former President Donald Trump. This latest decision marks a complex interplay of geopolitical strategy, economic interests, and corporate adaptation in the high-stakes global technology landscape.