US Lifts Export Ban on Nvidia's H20 Chip to China, Signaling Diplomatic Thaw

Nvidia has resumed sales of its H20 AI chip to China after the US government granted export licenses. This marks a significant reversal from the Trump administration's stance. The decision follows weeks of diplomatic easing between the US and China, with both countries agreeing to a unclear truce on critical technology exports. Nvidia's CEO Jensen Huang sees this as a major victory, citing the previous ban as a "failure" that benefited Huawei. The move has positively impacted the markets, with Nasdaq futures and Hong Kong and mainland Chinese stock exchanges rising.

Nvidia (NASDAQ:NVDA) has announced that it will resume sales of its H20 AI chip to China after securing assurances from the U.S. government that export licenses will be granted. This decision marks a significant reversal from the Trump administration's earlier stance on exporting advanced chips to China. The move comes amid weeks of diplomatic easing between the U.S. and China, with both countries agreeing to a truce on critical technology exports [1][2].

Nvidia's CEO Jensen Huang hailed the decision as a major victory, stating that the previous ban had been a "failure" that benefited Huawei and other Chinese competitors. The H20 chip, designed to comply with U.S. export controls, had been halted from sales in China since April [3].

The resumption of H20 chip sales is expected to have a positive impact on Nvidia's financial performance. The chip was specifically designed to meet Chinese demand while adhering to U.S. export restrictions. The decision to resume sales is seen as a strategic move to regain market share in China, where Nvidia's share has dipped from 60% to 45% due to the export ban [4].

The stock market has responded positively to the news, with Nasdaq futures and Hong Kong and mainland Chinese stock exchanges rising. Nvidia's stock was indicated 3% higher overnight, while AMD (AMD) and Taiwan Semiconductor (TSM) also saw their stocks rise [3].

The decision to resume H20 chip sales is part of a broader shift in U.S. policy towards China. The U.S. government has been reassessing its stance on exporting advanced technology to China, with the Biden administration showing a willingness to balance security concerns with economic interests [4].

Nvidia's strategic gambits, including the development of a new B30 chip and investments in AI infrastructure in Europe, are aimed at reducing reliance on the Chinese market and navigating the complex geopolitical landscape [4]. The company is also engaging in lobbying and diplomacy efforts to secure more favorable export policies.

For investors, the resumption of H20 chip sales presents both opportunities and risks. While the move signals a potential easing of U.S. policy, geopolitical tensions remain a significant factor. Investors should monitor the situation closely and consider diversifying their portfolios to include U.S. chipmakers like Intel (INTC) and AMD, which could benefit from U.S. tech nationalism [4].

In conclusion, Nvidia's decision to resume H20 AI chip sales to China is a significant development in the ongoing tech Cold War between the U.S. and China. The move signals a shift in U.S. policy and presents both risks and opportunities for investors. As the geopolitical landscape continues to evolve, investors should stay vigilant and let the data decide.

References:
[1] https://seekingalpha.com/news/4467297-nvidia-to-resume-h20-chip-sales-to-china-after-us-assures-export-licenses
[2] https://www.cnbc.com/2025/07/15/nvidia-says-us-government-will-allow-it-to-resume-h20-ai-chip-sales-to-china.html
[3] https://www.investors.com/news/technology/nvidia-trump-administration-resume-h20-ai-chip-sales-china/
[4] https://www.ainvest.com/news/nvidia-crossroads-china-export-controls-halt-ai-dominance-2507/