The US Commerce Department has begun to issue licenses for Nvidia to export H20 chips to China after a period of inactivity, following a meeting between CEO Jensen Huang and President Donald Trump at the White House.
A US official informed the Financial Times that the Bureau of Industry and Security, which is part of the Commerce Department that manages export regulations, has started issuing licenses for the H20.
Nvidia created the chip specifically for the Chinese market after the Biden administration enacted export restrictions on more advanced AI chips.
In April, the Trump administration seemed to take a stricter stance by instructing Nvidia not to sell the H20 to China. However, Trump changed his mind after Huang lobbied him in person at the White House. Despite this, Nvidia was disappointed when, three weeks later, the licenses had yet to be released.
Huang met with the president again on Wednesday, and just two days after that, the Commerce Department began issuing the licenses, according to sources close to the situation.
One source indicated that the decision to proceed with issuing the export licenses was influenced by Huang’s discussion with Trump in the Oval Office.
Neither Nvidia nor the Commerce Department provides comments.
The H-20 has sparked a debate among security officials, who argue that permitting China to purchase the H-200 could bolster its military. Conversely, Nvidia contends that preventing US technology exports compels China to speed up its own innovation.
Last week, the Financial Times reported that 20 security experts, including Matt Pottinger, a deputy national security adviser during the first Trump administration, and David Feith, who worked at the National Security Council earlier this year, wrote to Commerce Secretary Howard Lutnick, urging him against allowing the sale of H20 to China.
The security officials stated in their letter that this decision would represent a “strategic mistake that endangers the United States’ economic and military advantage in artificial intelligence.” Nvidia responded by saying that the criticism was “misguided” and dismissed the notion that China could utilize the H20 to enhance its military capabilities.
Nvidia experienced a $4.5 billion loss in the July quarter and an additional $2.5 billion in missed sales, following the implementation of the original license requirement by the White House. This action caught the company off guard, as it had recently assured its Chinese clients that they would continue receiving service.
It was perceived as a prohibition that would effectively eliminate the legal sale of Nvidia’s AI chips in China, severing the company’s access to a market that Huang has predicted will reach $50 billion in the next two to three years.
The company anticipated an $8 billion revenue decline from China for the July quarter.
The company was looking into the possibility of developing a new AI chip tailored for the Chinese market that adhered to the updated export regulations.
Huang has cautioned that these restrictions will provide companies like Huawei with an advantage in the global competition to create the hardware necessary for artificial intelligence.
According to Huang, Nvidia's share of that market has dropped from 95 percent to 50 percent over four years as Chinese competitors have made progress, calling the US export policies a "failure."
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