US Allows Nvidia to Sell AI Chips to China Amid Rare Earth Mineral Deal

US company Nvidia is allowed to sell its H20 AI chip to China, a multibillion-dollar boon, after a private meeting between President Trump and CEO Jensen Huang. The move is part of broader trade negotiations, including rare earth mineral access from Beijing. Critics argue the administration is sending conflicting messages, warning that US AI chips could strengthen China's military capabilities and threaten US innovation.

American technology giant Nvidia has received approval from the U.S. government to resume sales of its H20 AI chip to China. The move follows a private meeting between President Donald Trump and Nvidia CEO Jensen Huang, and is part of broader trade negotiations, including access to rare earth minerals from Beijing.

The approval is a significant boon for Nvidia, which had seen its sales to China restricted in April 2025 due to national security concerns. The sudden export halt resulted in a USD 4.5 to 5.5 billion loss in sales for the company, as Chinese firms turned to alternatives like Huawei [2].

The decision to lift the restrictions comes after months of lobbying by Nvidia and other U.S. tech firms. CEO Jensen Huang met with President Trump and U.S. policymakers to advocate for the easing of restrictions. Huang stated, "Today, I'm announcing that the U.S. government has approved for us filing licenses to start shipping H20s" during an interview broadcast on Chinese state TV [1].

The approval is expected to boost Nvidia's business and its supply chain. Market reaction was positive, with renewed activity in U.S. tech stocks and the Hang Seng Tech Index. Nvidia shares closed at USD 164.07, down by 0.85 points or 0.52% due to profit booking, but the broader market saw a slight rise [2].

Critics argue that the administration is sending conflicting messages. While the move could strengthen U.S. competition in the global AI market, it also raises concerns about potential misuse of U.S. technology to bolster China's military capabilities and threaten U.S. innovation [3].

Nvidia is not the only beneficiary of this decision. AMD, another major chipmaker, is also planning to restart sales of its AI chips to China, following a similar path [3].

References:
[1] https://apnews.com/article/nvidia-china-ai-chips-h20-trump-91588c36559bc881b8e010a9ed95cf0a
[2] https://www.goodreturns.in/news/jensen-huang-announces-u-s-approval-for-nvidias-h20-ai-chip-exports-to-china-1442751.html
[3] https://www.cnn.com/2025/07/15/business/nvidia-resume-h20-chip-sales-to-china-intl-hnk