Nvidia Seeks to Regain Foothold in China with Advanced AI Chips

Nvidia CEO Jensen Huang has stated that the company aims to offer more advanced AI chips in China, despite US-China tensions. The company has resumed sales of its H20 chip in China after a ban was lifted, but is still facing export restrictions that have resulted in a $4.5 billion charge and $2.5 billion in lost revenue. Huang has argued that losing the Chinese market would be a major setback for American tech firms and could lead to Chinese competitors dominating the local market.

Nvidia Corp. has announced that it has resumed sales of its H20 AI GPU to China after receiving approval from the U.S. government. The move comes after a period of export restrictions that had halted sales since April 2025, resulting in a $4.5 billion charge and $2.5 billion in lost revenue [1].

The decision to lift the export ban on the H20 chip marks a significant shift in U.S.-China trade relations. Nvidia CEO Jensen Huang has been vocal about the impact of export controls on American tech firms, arguing that losing the Chinese market would be a major setback [2]. The resumption of sales is expected to boost Nvidia's business and supply chain, as well as its market share in the Chinese AI chip market.

The H20 chip was designed to bypass earlier export controls and had been a key product in Nvidia's strategy to maintain its leadership in the AI hardware market. The resumption of sales aligns with a broader U.S.-China trade détente, which also includes China's relaxation of rare earth exports and U.S. approvals for resuming chip-design software services [2].

However, the resumption of H20 chip sales comes with its own set of challenges. The U.S. government has assured Nvidia that licenses will be granted, but the company has yet to start deliveries. Additionally, the long-term impact of the H20 chip's return remains uncertain, as China continues to invest heavily in its domestic chip production and AI frameworks [3].

Investors have reacted positively to the news, with Nvidia shares up 4.5% on trading platforms like Robinhood as of 12:20 a.m. ET. However, the long-term upside hinges on sustained AI demand and the company's ability to navigate ongoing geopolitical tensions.

The resumption of H20 chip sales is a step forward for Nvidia, but it also underscores the complex nature of U.S.-China trade relations. As the AI race continues, both technology and diplomacy will play crucial roles in determining the future of the global semiconductor industry.

References:
[1] https://www.cnbc.com/2025/07/15/nvidia-says-us-government-will-allow-it-to-resume-h20-ai-chip-sales-to-china.html
[2] https://www.ainvest.com/news/nvidia-return-china-catalyst-ai-semiconductor-growth-trade-policy-shifts-2507/
[3] https://www.goodreturns.in/news/jensen-huang-announces-u-s-approval-for-nvidias-h20-ai-chip-exports-to-china-1442751.html