Nvidia on Tuesday announced it expects to resume shipments of its H20 artificial intelligence chips to China, signaling a pivotal shift in U.S. policy that could restore billions of dollars in business for the chip giant.
The move comes after a closed-door meeting between Nvidia CEO Jensen Huang and President Donald Trump last week at the White House.
The H20 chips — a scaled-down variant of Nvidia’s powerful Hopper-based GPUs — had been designed specifically to comply with previous U.S. export restrictions on advanced semiconductors to China. However, those sales were halted in April after the Trump administration required Nvidia to obtain a special license for exports to Chinese clients.
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In a statement Tuesday, Nvidia confirmed the White House has now assured the company that such licenses will be granted. “Nvidia hopes to start deliveries soon,” the company added. The announcement immediately sent Nvidia stock soaring, with shares climbing more than 4% to close at a record high of $170.70.
Commerce Secretary Howard Lutnick later clarified that the administration reversed course after weighing the strategic benefit of keeping Chinese developers dependent on U.S. technology.
“We don’t sell them our best stuff, not our second best stuff, not even our third best,” Lutnick said in an interview with CNBC. “We want to keep having the Chinese use the American technology stack because they still rely upon it.”
The administration’s decision is seen as a dramatic turn in U.S.-China tech diplomacy. The Trump White House had previously clamped down on chip exports under a national security rationale, arguing that AI hardware could be used for military and surveillance purposes. Yet, under the new framework — which includes a broader rare earths agreement signed with China — Washington is permitting the limited return of U.S. chip exports, albeit with performance restrictions.
“The fourth one down, we want to keep China using it,” Lutnick explained, referring to the H20 chip’s lower-tier performance compared to Nvidia’s flagship AI chips like the H100, H200, and the next-generation Blackwell chips. He said this is part of a strategic move to “get Chinese developers addicted to the American technology stack,” preventing them from turning to domestic alternatives or rivals such as Huawei.
The policy shift followed a meeting last week between Trump and Huang, in which the Nvidia chief reportedly reaffirmed the company’s commitment to domestic job creation and American tech leadership. According to insiders, Trump signaled his support for the company’s efforts to remain competitive globally, especially as Chinese firms aggressively expand their AI capabilities.
Nvidia had previously said the halt in H20 sales would cost the company $8 billion in lost orders in the July quarter alone. The resumption of those shipments now restores a vital sales channel in what has historically been a key market. In 2023, Nvidia’s revenue from China made up nearly a fifth of its total data center sales.
Research analyst Dan Ives of Wedbush Securities called the decision a “gamechanger.” In a note, he wrote: “Trump knows there is one chip in the world fueling the AI revolution and it’s Nvidia. Giving the green light to Jensen/Nvidia is all part of broader trade negotiations with China. Nvidia gets $30 billion+ annual business back.”
The H20 chip, first introduced in 2022, was engineered with fewer GPU cores and limited bandwidth — design tweaks aimed at ensuring the product did not run afoul of export rules imposed during the Biden administration. Despite the limitations, the chip has remained attractive to Chinese companies like Moonshot and DeepSeek, who have shown that even lower-spec chips are viable for competitive AI applications.
In fact, Nvidia is reportedly preparing to launch a new GPU for the Chinese market — tentatively called RTX PRO — designed to be “fully compliant” with the export control regime. CEO Jensen Huang highlighted the chip during the same announcement, calling it ideal for smart factories and logistics.
Ray Wang, research director at Futurum Group, said the unexpected lifting of restrictions on the H20 is a clear win for Nvidia.
“This marks a significant and positive development that will enable Nvidia to reinforce its leadership in China,” Wang said. He added that the move, combined with new export-compliant AI chips, could be a “fresh growth catalyst” for the company in the coming quarters.
While the administration’s shift could provoke criticism from lawmakers who back tougher tech sanctions on China, the broader context involves recent de-escalation between Washington and Beijing. Last month, both sides agreed to a tentative trade framework that included easing some rare-earth and tech-related curbs — an indication that mutual dependencies in AI and clean energy supply chains are forcing a more pragmatic posture.