China commerce ministry, on US approves sale of Nvidia H20 chips: US should abandon zero-sum mentality -statement

China commerce ministry, on US approves sale of Nvidia H20 chips: US should abandon zero-sum mentality -statement

The U.S. government has approved Nvidia's request to resume sales of its H20 artificial intelligence (AI) chips to China, a significant development in the ongoing trade negotiations between the two nations. This decision comes after months of uncertainty and financial impact due to export restrictions imposed in April 2025.

Nvidia, the world's most valuable company, had been forced to halt sales of its H20 chips to China due to the export restrictions. The ban resulted in the company writing off $5.5 billion in inventories and missing out on $15 billion in sales. The resumption of sales is expected to unlock over $10 billion in delayed revenue for the company [3].

The move is part of a broader effort to boost rare earth supplies, a critical component for U.S. manufacturing. The U.S. government has described the easing of chip curbs on China as a "nuanced" move, while the yuan remains steady amidst dollar strength. The trade détente followed China's March 2025 halt to rare earth exports, a direct response to Trump's new tariffs. The chip ban lift appears to be part of a broader deal to reopen rare earth supply lines [3].

Nvidia's CEO Jensen Huang has been actively engaging with both U.S. and Chinese officials. He recently met with Trump and other U.S. policymakers and is currently in Beijing to attend a supply chain conference and speak with Chinese officials. The company has also introduced a new AI chip, the RTX Pro GPU, specifically designed to meet regulatory requirements in the Chinese market. This new chip is expected to be priced significantly lower than the H20 and is designed for digital twin AI applications in sectors such as smart factories and logistics [1].

The resumption of H20 chip sales is expected to fuel a new wave of GPU-driven growth in Asia, particularly in China, which is home to half of the world's AI researchers [4]. The move signals a strategic reprioritization of economic collaboration over unilateral sanctions, with far-reaching implications for semiconductor partners like Samsung.

Analysts have responded positively to the news. Needham has adjusted its price target for Nvidia's stock to $200 from $160. Additionally, an insider at the company sold shares worth $37.6 million, indicating confidence in the company's future prospects [2].

The China Commerce Ministry has stated that the U.S. should abandon its zero-sum mentality and embrace a more collaborative approach to trade. The ministry has praised the move as a step in the right direction towards mutually beneficial trade relations [1].

References:
[1] https://www.ainvest.com/news/nvidia-boost-h20-chip-sales-china-easing-export-restrictions-2507/
[2] https://www.cnn.com/2025/07/15/business/nvidia-resume-h20-chip-sales-to-china-intl-hnk
[3] https://m.economictimes.com/news/international/global-trends/donald-trump-nvidia-jensen-huang-china-h20-chip-deal-rare-earth-magnets-us-export-tech-trade/articleshow/122616868.cms
[4] https://newsarawaktribune.com/nvidia-says-it-will-resume-h20-ai-chip-sales-to-china-soon-following-us-government-assurances