President Donald Trump’s administration has reversed its ban on advanced artificial intelligence computer chip sales to China, granting Nvidia approval to resume exports of its H20 processors following intensive lobbying efforts by the company’s leadership.
Nvidia CEO Jensen Huang announced the policy shift during a visit to Beijing on July 15, revealing that the U.S. government had assured his company that licenses would be granted for H20 chip shipments. “Today, I’m announcing that the U.S. government has approved for us filing licenses to start shipping H20s,” Huang told reporters in the Chinese capital.
The announcement represents a significant reversal from the Trump administration’s April decision to restrict sales of Nvidia’s H20 chips and AMD’s MI308 chips to China on national security grounds. The White House had implemented the licensing requirement as part of the president’s broader trade policy initiatives.
Huang met with Trump and other U.S. policymakers before his Beijing trip, where he attended the China International Supply Chain Expo and spoke with Chinese officials. The broadcast showed him meeting with Ren Hongbin, head of the China Council for Promotion of International Trade, which hosted the supply chain conference.
The chip ban had severely impacted Nvidia’s financial performance, with the company reporting that the tighter export controls would cost an estimated $5.5 billion. The restrictions led to $4.5 billion in inventory write-downs and approximately $2.5 billion in lost projected sales during the pause period.
Wall Street analysts praised the development as a major victory for the semiconductor giant. Melius Research analysts indicated that Nvidia’s return to the Chinese market after the mid-April ban represents a significant tailwind for the company. Daniel Ives of Wedbush Securities described the decision as a watershed moment for Nvidia and the broader AI industry, calling it a monster win for the company.
The news drove Nvidia’s stock price up 4.5% to $171.40 in pre-market trading on July 16. The company had recently achieved a historic milestone by becoming the first public corporation to surpass a $4 trillion market valuation, driven by enormous profits from the rapid adoption of artificial intelligence technology.
During his Beijing visit, Huang emphasized the importance of the Chinese market for AI development, noting that half of the world’s AI researchers are located in China. He described the country as innovative and dynamic, making it crucial for American companies to compete and serve the market there.
The H20 chip was originally designed to comply with earlier U.S. export controls on China, featuring specifications that met previous regulatory requirements while still providing advanced AI processing capabilities. With export licenses now expected, Nvidia anticipates a significant revenue boost during the second half of 2025.
Huang downplayed his personal role in convincing the administration to lift the restrictions. Speaking to journalists in Beijing on July 16, he indicated that he did not believe he changed Trump’s mind. The CEO characterized his role as informing governments about the nature and unintended consequences of their policies, while emphasizing that the final decision rested entirely with American and Chinese officials.
The trade rivalry between the United States and China has heavily impacted the semiconductor industry over recent years. Washington has steadily tightened controls on exports of advanced technology to China, citing concerns that civilian-use technology could be deployed for military purposes.
The emergence of China’s DeepSeek AI chatbot in January renewed concerns about how China might utilize advanced chips to develop competitive AI capabilities. The Biden administration had launched a new framework for exporting advanced computer chips used in AI development before Trump’s second term began, attempting to balance national security concerns with economic interests.
China generated $17 billion in revenue for Nvidia in the fiscal year ending January 26, accounting for 13% of the company’s total sales according to its latest annual report. Huang has acknowledged China as a key market for the company and argued that closing off the Chinese market would only harm U.S. technology firms.
Technology industry leaders had lobbied Trump to reverse the chip restrictions, arguing that such limits hinder U.S. competition in a cutting-edge sector within one of the world’s largest technology markets. They also warned that U.S. export controls could push other countries toward China’s AI technology platforms.
The policy reversal occurs as Nvidia dominates the AI hardware market, commanding an estimated 97% share of the GPU accelerator segment. These powerful computer chips accelerate complex tasks like training artificial intelligence systems, working alongside regular processors to handle intensive AI computations.
Chinese specialist website founder Zhang Guobin indicated the new policy would bring substantial revenue growth for Nvidia, compensating for losses from the previous ban while easing trade friction impacts on the global semiconductor supply chain. However, he noted that Chinese firms remain focused on domestic chip development due to concerns about potential future policy shifts from the Trump administration.
