Nvidia has won U.S. approval to resume H20 AI chip exports to China after a reversal in Trump-era restrictions—boosting revenue and reshaping global tech trade.
Table of Contents
Introduction
Nvidia (NVDA) has just reversed course: following a meeting between CEO Jensen Huang and President Trump, the U.S. Commerce Department will allow licensed sales of its H20 AI chip to China again. This marks a strategic pivot in the Trump administration’s export policy—balancing national security with U.S. leadership in AI and commercial gains.
🔍 What’s Going On
- Sales will resume: Nvidia’s China-specific H20 GPU, restricted in April, will now be allowed under new export licenses. AMD is also restarting shipments of its MI308 chips.
- Rare earths deal connection: Commerce Secretary Howard Lutnick confirmed the move is tied to a larger trade agreement: U.S. eased AI chip restrictions in exchange for increased rare earth and magnet exports from China.
🧠 Why It Matters
1. Strategic AI Leverage
U.S. officials believe allowing China to use an older-generation chip keeps them reliant on American tech — maintaining the U.S. as the global innovation standard. Lutnick told CNBC: “We want them addicted to the American technology stack.”
2. Revenue Boost for Nvidia
The ban cost Nvidia billions in Q1 inventory losses. With China representing 13% of its revenue ($17 billion/year), stocks rose 4–5%, and shares briefly topped $172 following the news.
3. Global Trade & Tech Diplomacy
This move signals a thaw in U.S.–China tech tensions. It’s part of a multi-sector compromise—export licenses for AI chips in exchange for rare earth shipments—and indicates potential easing of broader export controls.
📦 What’s Next
| Milestone | Timing | Significance |
|---|---|---|
| License reviews by Commerce | July–August 2025 | Once approved, deliveries start |
| Jensen Huang in Beijing | Mid‑July 2025 | To promote H20 resumption & new RTX Pro GPU |
| AMD MI308 licenses | In progress | AMD stock rose ~6% on news |
| Congressional oversight | Ongoing | Some legislators criticize the pivot |
🔍 Sector Implications
- Tech Investors: Nvidia stock may continue to climb; AMD shares also rising.
- AI Developers: Chinese firms can resume building models using Nvidia’s CUDA ecosystem—slowing the shift toward domestic alternatives.
- Geopolitical Watch: The rare earth-chip deal highlights how semiconductors and minerals are becoming bargaining tools in international policy.
- Policy Debates: Critics argue this risks U.S. leadership; defenders claim it secures future tech dominance.
✅ Final Take
Nvidia’s reentry into China via an export reversal is a major development in the global AI race. It safeguards billions in revenue and secures American tech influence—as long as China remains tied to U.S. chips and platforms. Investors, policymakers, and industry leaders should watch upcoming license approvals and global trade negotiations for signs of bigger shifts.
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