US clears Nvidia to resume H20 chip exports to China

WEB DESK: The US Commerce Department has begun granting licences to Nvidia to export its H20 chips to China, a senior American official told Reuters on Friday. The move eases a major obstacle for the tech giant’s access to one of its most important markets.

The decision follows Washington’s reversal last month of an April ban on selling the H20 in China. Nvidia had designed the chip specifically for Chinese customers to meet Biden-era restrictions on advanced AI hardware.

Those curbs have already taken a toll on the company’s bottom line. Nvidia previously warned that the restrictions could wipe $8 billion from its July-quarter sales.

Nvidia chief executive Jensen Huang met president Donald Trump on Wednesday, according to two people familiar with the matter. The company declined to comment, and the White House did not respond to a request for comment.

Back in July, Nvidia said it had filed applications with US authorities to resume selling the H20 in China and had been assured the licences would be approved soon. It remains unclear how many licences have been issued so far, which Chinese companies are eligible to receive shipments, or how much business will be allowed.

The chipmaker disclosed in April that it expected a $5.5 billion charge due to the export restrictions. In May, it revised that figure down by $1 billion after finding ways to repurpose some materials.

Friday’s development was first reported by the Financial Times.

Last month, Nvidia also rejected Chinese concerns that the H20 might pose security risks, stressing that its products have no hidden “backdoors” for remote access or control.

China’s importance to Nvidia

Exports of Nvidia’s other advanced AI chips to China remain restricted. For years, successive US administrations have limited the sale of high-end semiconductors to Beijing to slow the development of its AI and defence industries.

While these measures have curbed American companies’ ability to fully tap China’s fast-growing AI market, the country remains a crucial source of revenue for US chipmakers.

Huang has previously warned that Nvidia’s global lead could slip if it is unable to sell to China, where domestic tech champions like Huawei are courting developers with homegrown chips.

In May, Nvidia reported that H20 sales brought in $4.6 billion in the first quarter, with China accounting for 12.5 percent of its total revenue during the period.