Nvidia, the colossal American chipmaker, is making waves by announcing that it will restart sales of its key artificial intelligence chip to China. This blog-worthy news comes as part of a larger narrative involving global power dynamics between top economies.
This development follows a meeting last week between Nvidia’s CEO, Jensen Huang, and former President Trump at the White House. Huang made a compelling case for why restricting the sale of critical American tech to China could jeopardize the US’s standing as a leader in AI. Moreover, Nvidia stated that these market limitations have cost them billions in potential revenue.
Adding to the excitement, AMD, another giant in the chip-making arena, announced plans to kickstart its AI chip sales to China as well. They confirmed that the Department of Commerce is opening the floor to license applications for exporting MI308 products.
“We’ve been notified that our export license applications for MI308 chips will now be evaluated,” the company stated, expressing gratitude towards the Administration for facilitating trade negotiations.
Interestingly, the White House took the opportunity to comment on this shift, hinting that Nvidia’s export controls have been used as a bargaining chip in broader trade talks with China.
Commerce Secretary Howard Lutnick indicated that resuming Nvidia’s AI chip sales to China is a component of their trade agreement concerning rare earth materials. “It was a point included in the deal regarding magnets,” he told Reuters.
The issue of China’s rare earth exports has been central to negotiations between the two countries. In exchange for improving the shipment of these vital resources, the US made concessions by lifting export controls on certain tech goods.
Undoubtedly, Nvidia has established itself as a powerhouse, being the first publicly listed company to hit a valuation of $4 trillion, largely due to its significant role in the rising AI market. Their chips are crucial for applications ranging from AI-driven chatbots to robotics and self-driving vehicles.
Last year, Nvidia rolled out the H20 chip to keep its foothold in China, accounting for 13% of their sales in 2024, especially with navigating the strict US export limitations.
However, in April, the company faced hurdles when they were instructed by the White House to acquire a unique license to export the H20 successors, triggering a halt in sales. The H20 chip has been integral to fueling Advanced AI models in China.
On Monday, the good news was dropped: Nvidia has reapplied for permission to resume H20 sales in China and has received assurances that the licenses will soon be greenlit, allowing for deliveries to commence shortly.
There’s a tangible American urgency behind these decisions; the government aims to prevent Chinese access to US technology that could enhance its military and formidable AI systems. Yet Huang warned that restricting sales may backfire, leading to independent Chinese tech advancements that could challenge US dominance.
“To be a worldwide tech leader, it’s crucial that we maintain our standards. Just as we advocate for the US dollar as a global benchmark, we should push for American tech to set the international pace,” Huang remarked in an interview with CNN.
This year alone, Nvidia reported a staggering $2.5 billion loss in potential revenue from halted H20 sales in the first quarter and anticipated another $8 billion dip for the second. Last month, they excluded China from forecasted revenue due to the instability surrounding export regulations.
Looking ahead, Huang is set to host a media event in Beijing during a supply chain expo, marking his second official visit to China this year. His focus remains strongly on the expanding Chinese market.
