Nvidia to resume H20 chip sales to China in surprise US reversal

Straits Times

a day ago

Nvidia plans to resume sales of its H20 artificial intelligence accelerator to China based on assurances from Washington that such shipments would be approved, a dramatic reversal from the Trump administration's earlier stance.
US government officials have told Nvidia that they would green-light export licences for the H20, the company said in a blog post on July 14. That China-specific variant of Nvidia's AI chips was created to comply with earlier trade curbs, but has since April also been blocked from sale in China. A spokesperson for the Commerce Department, which oversees semiconductor export controls, did not immediately respond to a request for comment.
Nasdaq futures surged after Nvidia's announcement, with Hong Kong and Chinese stocks also reacting positively. The Hang Seng Tech Index rose as much as 2.2 per cent, while data centre operators like Beijing Sinnet Technology jumped as much as 7.6 per cent.
'Nvidia resuming the sale of H20 to China is obviously positive,' said Union Bancaire Privee managing director Vey-Sern Ling. 'Not just for the company but also the AI semiconductor supply chain, as well as China tech platforms that are building AI capabilities. This is also a good development for US-China relations.'
Nvidia chief executive officer Jensen Huang met with US President Donald Trump last week and is in Beijing this week to attend a large supply chain expo. Mr Huang has told Nvidia customers that he expects new China licences to be granted and hopes to resume H20 deliveries soon.
Nvidia also plans to debut a new China-focused chip – the RTX PRO – that the company described as 'fully compliant,' meaning that it falls below the technical thresholds that would necessitate Washington's approval in the first place.
The Trump administration's about-face on H20 restrictions is a massive win for Mr Huang, who has been increasingly vocal over the past few months about his distaste for Washington's chip curbs.
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In May, he called the measures – which cover both chips themselves and the tools used to make them – a 'failure' that contributed to the rise of Huawei Technologies. He more recently said the US does not need to worry about the Chinese military using Nvidia chips, since Beijing cannot rely on something the US could restrict at any point.
The H20 is a less powerful version of Nvidia's gold-standard AI acceleration semiconductors, designed specifically for China. It is part of the company's response to US restrictions on AI hardware sales to China, which were first imposed in 2022 and ratcheted up several times since, capturing two successive generations of processors Nvidia made for the China market – the H800, followed by the H20.
After Trump officials controlled the sale of H20 chips in April, Mr Huang said Nvidia would suffer a cost of billions of dollars due to unsold inventory. BLOOMBERG