In a surprising twist in the ongoing trade saga between the U.S. and China, Nvidia—the world’s leading AI chipmaker—has received permission from the Trump administration to resume selling one of its AI chips in China.
This move marks a significant development after months of restrictions that had previously cost Nvidia billions.
Jensen Huang’s Positive Reception in Beijing
Nvidia’s founder, Jensen Huang, expressed his happiness after receiving assurances from U.S. officials that his company could start marketing the H20 AI chip in China once again.
Huang made the announcement while visiting Beijing, where he met with Chinese government representatives. The news sent Nvidia’s shares up by more than four percent before the stock market even opened.
What Is the H20 Chip and Why Does It Matter?
The H20 chip is a powerful product used in advanced data centers for training AI models and running AI applications.
Though it’s a top seller among Chinese clients, it’s important to note that the H20 isn’t Nvidia’s most advanced AI chip.
The U.S. government is still keeping a lid on sales of the very latest technology to China due to national security concerns.
Export Licenses and the Path Forward
Huang revealed that shipments of the H20 chip would restart once the U.S. Commerce Department processes Nvidia’s export license.
This cautious approach reflects Washington’s worries about giving China access to America’s cutting-edge tech, especially when it comes to AI hardware.
The Trump administration is reportedly considering similar permissions for other companies, including Nvidia’s rival Advanced Micro Devices (AMD).
AMD’s founder, Patrick Moorhead, confirmed on social media that export license applications for some of their AI chips are under review, and the company plans to resume sales as soon as approvals come through.
New AI Chips Tailored for Chinese Industry
In addition to the H20, Nvidia has developed a newer AI chip designed for automation and logistics in Chinese factories.
This chip is based on Nvidia’s most advanced “Blackwell architecture,” but it has been modified to meet the U.S. government’s export guidelines.
Concerns from U.S. Senators Ahead of Huang’s Visit
Before Huang’s trip to Beijing, U.S. Senators Jim Banks and Elizabeth Warren sent him a letter urging caution.
They asked Huang to avoid meeting with Chinese firms linked to the military or intelligence agencies, warning that freely exporting AI hardware could help China modernize its military capabilities.
The senators emphasized the strategic importance of these chips and stressed the potential risks to U.S. national security.
The Bigger Picture: Trade War Dynamics and AI Technology
This unexpected green light comes at a tense time for U.S.-China relations.
The two countries have been locked in a trade dispute since 2018, trading tariffs on goods ranging from rare earth metals to coal and machinery.
Although a tentative trade deal was announced earlier this summer with tariff reductions and some concessions, both sides remain cautious.
The Biden administration has also recently restricted AI-related exports to countries like Thailand and Malaysia due to fears that these chips could be smuggled into China, illustrating the delicate balance Washington tries to maintain between trade and security.
Economic Impact of the Trade War
The trade tensions have hit both countries economically.
Companies like Nvidia have suffered billions in lost sales, while rising commodity prices have pressured industries and consumers alike.
As the U.S. and China navigate this complex relationship, decisions about technology exports like this one will continue to play a critical role in shaping the future of global trade and security.