Commerce Department has begun issuing licences to Nvidia to export its H20 artificial intelligence chips to China, ending weeks of delays and marking a reversal in policy after direct intervention from President Donald Trump.
The move follows a meeting at the White House between Nvidia’s chief executive, Jensen Huang, and the president. According to officials familiar with the matter, the Bureau of Industry and Security, which oversees export controls, began processing the licences just two days after the Oval Office discussion.
The H20 chip was specifically designed for the Chinese market in response to earlier Biden-era restrictions on advanced AI chip exports. In April, the Trump administration initially blocked its sale, citing security concerns. However, Trump later shifted his stance following lobbying from Huang.
National security officials remain divided on the decision. Critics, including former Trump deputy national security adviser Matt Pottinger and ex-NSC official David Feith, argue that permitting H20 exports could aid China’s military and erode the U.S. technological advantage in AI. They warned Commerce Secretary Howard Lutnick in a formal letter that the move was a “strategic mis-step.”
Nvidia has pushed back, calling such concerns “misguided” and insisting that blocking U.S. chip sales only accelerates China’s domestic innovation efforts. The company has warned that restrictive export rules benefit competitors like Huawei, which could gain an advantage in the global AI hardware race.
The export restrictions have already cost Nvidia heavily. The company reported a $4.5 billion hit in the July quarter, with an additional $2.5 billion in lost sales, and had forecast an $8 billion drop in China-related revenue. Huang has described the export policy as a “failure,” noting Nvidia’s market share in China has fallen from 95% to 50% in just four years.
While licences for the H20 are now being granted, Nvidia is also developing a redesigned AI chip for China to comply with evolving U.S. export rules. The Chinese AI chip market, which Huang estimates could reach $50 billion within two to three years, remains a key focus for the company despite the geopolitical tensions.
