The U.S. Commerce Department has begun issuing export licenses to Nvidia (NVDA) for its H20 AI chips destined for China, a significant development that removes a major barrier to the chipmaker’s access to this critical market, a U.S. official told Reuters on Friday.
Last month, the U.S. government reversed an earlier April ban on selling the H20 chip to China. Nvidia had specially tailored the H20 microprocessor to comply with Biden-era AI export controls targeting the Chinese market.
Despite the easing, Nvidia warned that the restrictions would still cut $8 billion from its July quarter sales.
Nvidia CEO Jensen Huang reportedly met with President Trump on Wednesday, according to sources familiar with the meeting. Neither Nvidia nor the White House immediately commented on the export license issuance.
In July, Nvidia announced it had applied for licenses to resume H20 sales to China and expected approval soon, though details on the number of licenses, recipient companies, or shipment values remain unclear.
Earlier this year, Nvidia disclosed an expected $5.5 billion charge related to export restrictions, though the actual first-quarter charge was $1 billion less than anticipated, thanks to reuse of some materials.
Concerns from China about potential security risks in the H20 chip had been raised, but Nvidia has assured there are no “backdoors” enabling remote access or control.
Other advanced Nvidia AI chips, aside from the H20, remain restricted for export to China.
U.S. administrations have long limited advanced chip exports to China to slow Beijing’s AI and defense development, which has constrained U.S. companies’ ability to fully serve one of the world’s largest semiconductor markets. Yet, China remains a vital revenue source for American chipmakers.
Huang has warned that Nvidia’s leadership position could erode without sales to China, where local firms like Huawei Technologies are producing competing chips.
In May, Nvidia reported that the H20 generated $4.6 billion in sales during the first quarter, with China accounting for 12.5% of overall revenue.
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