China Gets NVIDIA AI Chips Again as US Approves Sales

NVIDIA is probably the company that has best taken advantage of the AI boom. The company anticipated others and made the necessary adjustments to become one of the leading suppliers of AI chips, resulting in massive growth for the company in subsequent years. That said, trade restrictions with China have also affected it. That said, NVIDIA has received some good news: they can now continue selling sales of AI chips to China.

NVIDIA officially announced the new development in a blog post. The American firm has received approval from the US government to resume selling its advanced H20 AI GPU to China. This decision marks a reversal of previous restrictions and opens the door for NVIDIA to re-enter a crucial market. It’s a pretty significant development for the global tech landscape.

NVIDIA officially resumes sales of AI chips to China

The news follows discussions between NVIDIA CEO Jensen Huang, Chinese officials, and even US President Donald Trump, signaling a thaw in what had been a strained trade situation for high-tech components. Earlier restrictions, which saw the H20 chip banned in April, had resulted in billions of dollars in lost sales and significant inventory write-offs for NVIDIA.

This renewed access is a major win for the chip giant. With licenses now being granted, NVIDIA anticipates generating substantial additional revenue. We are talking about a movement with an estimated value in the range of $15-20 billion this year alone. The company was reportedly holding $8 billion in unshipped orders awaiting the green light. Now, it hopes to begin deliveries of the H20 GPU to Beijing soon.

Chinese tech titans, including ByteDance and Tencent, are reportedly gearing up to place new orders for NVIDIA’s GPUs. It’s noteworthy that the domestic AI competition in China has been growing at a good pace. In fact, this has called into question the real effectiveness of US trade restrictions. However, many firms still prefer NVIDIA’s offerings, primarily due to its robust CUDA computing platform. This ecosystem is widely favored for its efficiency in parallel processing, which is essential for advanced AI operations.

US-China trade deal closer?

The easing of these chip export restrictions from the US side also coincides with China’s own recent moves to ease rare earth export restrictions. This parallelism suggests a potential broader agreement or de-escalation in trade tensions between the two global superpowers. Are we close to a definitive trade deal between the two big powers? Only time will tell.

For NVIDIA, regaining access to the Chinese market is strategically vital. CEO Jensen Huang had previously voiced concerns about the company potentially losing its global AI leadership if it remained unable to sell its chips in China. This particular market accounted for 13% of its global sales in the last fiscal year. This figure is massive considering that they come from a single country.

Investors, of course, are responding positively to this development. NVIDIA’s shares are seeing a notable rise shortly after the announcement. It signals a renewed opportunity for NVIDIA to strengthen its position in the AI hardware race and for Chinese companies to access preferred technology, potentially accelerating their AI development efforts.