Nvidia Set to Resume AI Chip Sales in China After U.S. Approval

Nvidia is set to resume selling its AI chips in China, reversing a previous block by the U.S. government.

As we reported back in April, the U.S. action had unintended consequences, particularly boosting Huawei’s sales of its Ascend AI accelerators, which are seen as a local alternative to Nvidia’s more advanced GPU chips. This ban was part of a broader U.S. effort to prevent China from accessing cutting-edge technologies that could enhance its military capabilities.

However, with a statement issued last night, Nvidia announced it is actively seeking approval from the U.S. government to restart shipments of its H20 chips to China. The company is optimistic that it will receive the necessary licenses soon. The H20 chips are the most powerful models Nvidia can legally sell to China, under the restrictions imposed by both President Donald Trump and President Joe Biden.

The move comes at a critical time for Nvidia. CEO Jensen Huang, who is currently in Beijing for an event tomorrow, emphasized that the company’s global leadership in AI could be at risk if it cannot reenter the Chinese market. A report published today revealed that Chinese companies, including ByteDance (TikTok’s parent) and Tencent, are preparing to place substantial orders for Nvidia’s chips, which will require approval from the U.S. government before they can proceed.

For the fiscal year ending January 26, 2025, Nvidia generated $17 billion in revenue from China, representing 13% of its total sales. Despite the ban, Nvidia’s computing platform, CUDA, remains the preferred choice for Chinese tech companies. CUDA enables developers to harness the power of Nvidia’s GPUs for parallel processing, a crucial component for AI applications that require handling massive amounts of data simultaneously.

Following the announcement, Nvidia’s stock surged by nearly 4%, pushing its market value to $4.16 trillion. The company’s shares now stand at $170.60, reflecting investor optimism about its renewed access to the Chinese market.