U.S. Greenlights NVIDIA and AMD to Sell AI Chips to China: A Boost for Semiconductors

The US government has approved NVIDIA and AMD to sell AI chips to China, boosting interest in the semiconductor sector. Sector ETFs have reacted positively, with China reopening its chip market. The timing is seen as perfect, given the sector's strong performance in recent years.

The US government has approved NVIDIA and AMD to resume sales of AI chips to China, marking a significant shift in trade policies and boosting interest in the semiconductor sector. This decision comes as a dramatic reversal from the Trump administration's earlier stance, which aimed to limit Beijing's AI ambitions. The move is expected to add billions to NVIDIA's revenue this year and restore its ability to fulfill orders previously written off due to government restrictions.

US government officials have assured NVIDIA that they will green-light export licenses for its H20 artificial intelligence accelerator, which was designed to comply with earlier China trade curbs. This move is anticipated to add billions to NVIDIA's revenue and restore its ability to fulfill orders previously lost due to government restrictions [1].

Similarly, AMD has received similar assurances from the US Commerce Department and plans to restart shipments of its MI308 chips to China once licenses for sales are approved [2]. This development is seen as a positive sign for the AI semiconductor supply chain and for Chinese tech platforms building AI capabilities.

The decision follows weeks of thawing relations between Washington and Beijing, guided by an opaque trade truce. The US government has lifted a spate of export controls on chip design software and other crucial technologies in return for China allowing more sales of rare-earth minerals needed to make high-tech products [1].

NVIDIA CEO Jensen Huang, who met with President Donald Trump last week and is currently in Beijing attending a government-sponsored conference, appeared on Chinese state broadcaster CCTV shortly after the announcement. Huang stated that the company had secured approval to begin shipping the H20 chips to China [1].

The sector ETFs have reacted positively to this news, with Chinese stocks also showing a positive reaction. Alibaba's shares rose as much as 6% in Hong Kong on Tuesday, the Hang Seng Tech Index rose as much as 2.2%, and data center operators like Beijing Sinnet Technology Co. jumped as much as 8.4% [1].

The timing of this decision is seen as perfect, given the strong performance of the semiconductor sector in recent years. NVIDIA's central role in providing hardware for AI infrastructure has been a significant driver of its market value, which hit $4 trillion last week [1].

References:
[1] https://finance.yahoo.com/news/nvidia-resume-h20-ai-chip-064336947.html
[2] https://news.bloomberglaw.com/ip-law/nvidia-to-resume-h20-ai-chip-sales-to-china-in-us-reversal-2
[3] https://www.cnbc.com/2025/07/15/nvidia-says-us-government-will-allow-it-to-resume-h20-ai-chip-sales-to-china.html