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The Trump administration reverses course, granting licenses for Nvidia to resume sales of its H20 AI chips to China. This decision follows intense lobbying efforts by tech industry leaders like Nvidia CEO Jensen Huang, who argued against export restrictions impacting American competitiveness. The move marks a significant shift in U.S. tech export policy towards China, balancing national security concerns with economic interests in the rapidly growing global AI market.
Trump administration greenlights resumption of H20 AI chip sales to China: Nvidia

Washington D.C. & Santa Clara, CA - July 14, 2025 - In a significant pivot on its stance on technology exports to China, the Trump administration has indicated to Nvidia that licenses will be granted for the resumption of sales of the company's H20 Artificial Intelligence (AI) chips to Chinese customers. This development, announced late Monday by Nvidia, follows intense lobbying efforts by CEO Jensen Huang and other tech leaders who argued that strict export controls were hindering American competitiveness in the crucial AI sector.
The announcement marks a substantial turnaround from earlier this year, when the White House had moved to restrict the sales of Nvidia's H20 chips, alongside AMD's MI308, to China, citing national security concerns. That decision prompted Nvidia to estimate a potential $5.5 billion revenue loss.
The H20 chip and the China market
The H20 chip was specifically designed by Nvidia to comply with previous U.S. government restrictions on exporting advanced AI chips to China. While slower than its predecessors like the H100 in training AI models, the H20 proved effective in inference – the process of running trained AI models – and had gained considerable traction within the Chinese market. Indeed, Chinese tech companies reportedly purchased $16 billion worth of H20 chips in the first three months of the year, anticipating potential restrictions.
Nvidia CEO Jensen Huang has been a vocal critic of the export controls, arguing that they not only stifle American innovation but also risk ceding the crucial Chinese market to domestic competitors like Huawei. China, with half of the world's AI developers and the largest market for chips globally, represents a massive opportunity for Nvidia. Huang emphasized the importance of American companies being able to compete and serve this market, highlighting the innovation and dynamism within China's tech landscape. He believes that excluding American technology from the Chinese market would only weaken the U.S. position in a rapidly evolving global AI race.
A potential shift in policy
The decision to allow H20 chip sales suggests a potential shift in the Trump administration's approach to the complex issue of tech exports to China. This move follows a period of intense pressure from tech companies and industry advocates who warned of the economic impact of decoupling from the Chinese market. Huang's lobbying efforts, which included a meeting with President Trump last week, appear to have played a significant role in the administration's reassessment of its earlier policy.
Sources suggest that the administration may be considering a move away from the tiered approach to export curbs towards a more globally focused licensing regime that emphasizes government-to-government agreements. This could potentially allow for more flexibility while still addressing security concerns.
Industry response and outlook
The news sent positive signals across the semiconductor industry. Shares of Nvidia, Advanced Micro Devices (AMD), Taiwan Semiconductor (TSM), and Super Micro Computer (SMCI) all saw positive movement in overnight trading following Nvidia's announcement. This suggests that the market views the resumption of H20 sales as a positive indicator for the broader industry, particularly as it may pave the way for AMD to resume its MI308 sales to China as well.
Ray Wang, research director of semiconductors, supply chain, and emerging technology at Futurum Group, called the lifting of the H20 ban a "significant and positive development for Nvidia," allowing the company to reinforce its leadership in China. The resumption of H20 shipments, along with the expected release of new export-compliant AI chips, is likely to serve as a growth catalyst for Nvidia in the coming quarters, Wang added.
Balancing economic interests and national security
The Trump administration's decision underscores the ongoing balancing act between promoting American business interests and safeguarding national security in the face of rising competition with China. While concerns remain about the potential for advanced technology to be used for military modernization or surveillance by the Chinese Communist Party, the economic implications of severely limiting access to the world's second-largest economy are also substantial. The administration's move to allow H20 chip sales to China could be seen as an effort to strike a balance, potentially exploring alternative ways to manage technological competition while allowing U.S. companies to participate in the growing Chinese AI market.
The situation remains dynamic, and it remains to be seen how the broader U.S.-China technology relationship will evolve in the coming months. However, the decision to allow Nvidia to resume H20 sales represents a notable step in a direction that favors continued engagement and market access for American tech companies in China.
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