Nvidia Receives US Licenses to Export H20 Chips to China

Nvidia has reportedly started receiving US licenses to export H20 chips to China, according to the Financial Times. The US Commerce Department has issued licenses for Nvidia to export its graphic processing units to China, despite ongoing tensions between the two countries. Nvidia CEO Jensen Huang has been working to expand the company's presence in China despite the challenges.

Nvidia (NVDA) has reportedly started receiving U.S. licenses to export its H20 chips to China, according to the Financial Times. The U.S. Commerce Department has issued licenses for Nvidia to resume exports of its graphic processing units (GPUs) to China, despite ongoing geopolitical tensions between the two countries. This development comes after Nvidia's CEO Jensen Huang met with President Donald Trump on Wednesday [3].

The H20 chip, tailored for the Chinese market, was previously subject to an export ban due to U.S. restrictions on AI chip exports to China. The ban, imposed in April, was reversed in August, allowing Nvidia to resume sales. The company had warned that the curbs would slice $8 billion off its sales in the July quarter [1].

The license approval is a significant boost for Nvidia, potentially averting an $8 billion loss in sales. The company had warned of a $5.5 billion charge due to the restrictions but was able to mitigate some of the impact by reusing materials. In May, Nvidia reported that the first-quarter charge related to these restrictions was $1 billion less than anticipated [1].

Nvidia's CEO Jensen Huang has been working to expand the company's presence in China despite the challenges. He has expressed concerns that the company's leadership position could slip without continued access to China, where rival companies like Huawei Technologies are aggressively targeting developers with locally produced chips [1].

The approval of Nvidia's export licenses is also set against the backdrop of continuing geopolitical tensions between the U.S. and China. The U.S. government has maintained strict controls over the export of cutting-edge semiconductor technologies, citing national security concerns related to China's AI and defense capabilities. This has sparked retaliatory actions from China, including trade barriers aimed at U.S. semiconductor firms [5].

Nvidia faces growing competition from Chinese chipmakers such as Huawei, Cambricon, and Hygon. Analysts at Bernstein have projected that Nvidia's market share in China's AI chip sector will decline, from 66% in 2024 to 54% in 2025, largely due to local companies' aggressive growth and the impact of U.S. sanctions [5].

Despite the license approval, Nvidia faces significant challenges. However, analysts like Needham's N. Quinn Bolton remain optimistic, forecasting strong demand for Nvidia's H20 and upcoming China-specific GPUs, particularly in the Chinese data center market [5].

References:
[1] https://www.reuters.com/world/china/us-licenses-nvidia-export-chips-china-official-says-2025-08-08/
[2] https://inshorts.com/en/news/us-issues-license-to-nvidia-to-export-h20-chips-to-china--report-1754725018610
[3] https://www.thehindu.com/sci-tech/technology/us-licenses-nvidia-to-export-chips-to-china/article69912473.ece
[4] https://seekingalpha.com/news/4482922-nvidia-reportedly-starts-getting-u-s-licenses-to-export-h20-chips-to-china
[5] https://www.benzinga.com/markets/tech/25/08/47017849/nvidias-8-billion-loss-may-be-averted-as-us-approves-h20-chip-exports-to-china-amid-trad-tensions-report