Nvidia H20 AI Chip: US Eases Restrictions, China Sales to Resume
Nvidia is making a big comeback. The company revealed that it expects approval to resume sales of its NVIDIA H20 AI CHIP to China soon. This shift comes after the U.S. government eased export restrictions, reversing a ban imposed in April 2025 that had cost Nvidia billions.
So, why is this happening now?
And what does it mean for Nvidia and the AI world?
What Changed with US Export Rules?
In April, the U.S. government halted H20 chip exports to China, citing national security concerns. This ban hit Nvidia hard, forcing it to take a $4.5 billion inventory charge and lose an estimated $2.5 billion in Q1 revenue, with further losses expected in Q2.
After discussions involving Nvidia’s CEO Jensen Huang, President Trump, and trade officials, the U.S. agreed to issue licenses for H20 exports. Nvidia confirmed this change in a July 14 blog post. Huang, now in Beijing, said shipments should resume soon.
On X, Nvidia’s official account celebrated the news:
“NVIDIA will resume H20 sales to China. The U.S. government has assured licenses will be granted, with deliveries expected soon.”
How Did the Ban Affect Nvidia?
The export ban had a sharp impact on Nvidia’s finances. The company recorded a $4.5 billion inventory write-down in Q1 and projected another $8 billion loss in Q2. That meant setting aside nearly $15 billion in lost sales from key Chinese customers.
Despite these setbacks, Nvidia’s data center revenue continued to grow, driven by the rest of the global market. Still, China makes up about 13 percent of Nvidia’s total sales, which adds up to nearly $17 billion annually.
@KobeissiLetter discussed Nvidia’s sudden overnight surge to $17/share following the announcement of Chip sales to China, after Trump’s assurances.
One of the X users highlighted the worth of Nvidia in the recent post:
What Will the NVIDIA H20 AI CHIP Look Like in China Now?
Nvidia designed the H20 chip specifically for China to meet earlier export rules, offering top-tier AI performance. After the ban, Nvidia also created a downgraded version with less memory and bandwidth, using GDDR7 instead of high-bandwidth memory.
Now, alongside resuming sales of the original H20, Nvidia is introducing another compliant chip, the RTX Pro 6000D, for use in factories and edge AI. These moves aim to keep Nvidia competitive despite tougher export rules.
What Are the Business Impacts for Nvidia in the Long Run?
Beyond immediate sales, Nvidia’s access to China supports long-term relationships with major clients and supply chain stability. With the demand for AI chips rising in sectors like autonomous vehicles, cloud computing, and robotics, Nvidia’s foothold in China means more than just short-term gains. Analysts expect the resumed H20 sales to stabilize Nvidia’s quarterly earnings and support its ambitious research and development plans.
Moreover, Nvidia’s ecosystem of software, CUDA tools, and infrastructure services remains unmatched, making the company’s chips more attractive to developers and enterprises in China. Even with growing local competition, Nvidia’s comprehensive package still holds a clear edge in performance and support.
These developments also underline the strategic value of Nvidia in the global tech race. Governments worldwide view AI hardware as a critical national asset, and Nvidia’s restored position in China strengthens its ability to set standards, influence trends, and shape the future of AI on a global level.
What Does This Mean for China’s Tech Industry?
China relies heavily on Nvidia’s AI chips. Major players like Tencent, Baidu, and Alibaba use H20 chips for building advanced AI systems. With shipments resuming, these giants can keep developing new models and services.
Still, local competition is rising quickly. Huawei, with its Ascend 920 chip, is stepping in to fill gaps left behind, offering strong performance and pushing domestic innovation.
How Are Analysts Reacting to Nvidia’s Return?
Analysts see this as a major win for Nvidia. Bloomberg described the move as a key victory for Nvidia’s business strategy. Financial services firm TipRanks highlighted the readiness to restart shipments once licenses are approved.
Jensen Huang said securing approvals puts Nvidia back in a position to serve one of its biggest markets. He emphasized that China’s AI market could grow to $50 billion quickly.
What About Trade Talks and Politics?
This policy change may also show improved diplomacy between the U.S. and China. Along with reduced tariffs and eased trade tensions, Washington’s decision to allow Nvidia to export H20 chips signals a willingness to balance national security with economic cooperation.
Huang met with President Trump before heading to China, highlighting how important these political conversations were to making the deal possible.
What’s Next for Nvidia and the NVIDIA H20 AI CHIP?
- Shipments are expected to restart in the coming weeks, following final approvals.
- Introduction of the RTX Pro 6000D targets industries like smart factories and logistics with compliant chips.
- Nvidia remains focused on safeguarding U.S. leadership in AI while meeting global demand.
Conclusion
The decision to resume NVIDIA H20 AI CHIP sales to China marks a key moment for Nvidia, signaling progress in trade policy and renewed access to a huge market. It shows how critical China is to Nvidia’s revenue and the global AI supply chain.
Though local competition is increasing, Nvidia’s software, infrastructure, and brand still give it a strong edge. With shipments set to restart soon, the company may quickly recoup billions in lost revenue and secure its lead in delivering advanced AI tools worldwide.
FAQ’S
Yes, the US had previously blocked H20 chip exports to China in April 2025 due to national security concerns.
Yes, Nvidia is now allowed to resume selling AI chips like the H20 to Chinese companies after getting approval.
Yes, Nvidia recorded nearly $15 billion in expected losses due to the earlier ban on China-bound chip sales.
Yes, Nvidia developed a downgraded version of the H20 using GDDR7 memory to comply with export limits.
No, China did not ban the H20 chip; the restriction was from the US side, which has now been relaxed.
The NVIDIA H20 AI CHIP is a high-performance GPU designed for AI applications, tailored for markets like China under specific export guidelines.
Disclaimer
This content is for informational purposes only and not financial advice. Always conduct your research.