The global semiconductor industry is witnessing a pivotal moment as Nvidia Corporation and Advanced Micro Devices Inc. (AMD) have secured assurances from the U.S. government to resume sales of specific artificial intelligence (AI) chips in China. This development marks a significant shift from previous restrictions and opens a lucrative market for both companies. With Nvidia’s H20 AI accelerator and AMD’s MI308 chips poised to re-enter China, this move is expected to drive billions in revenue and reshape the AI technology landscape. Below, we explore the implications of this decision, its impact on the industry, and the broader context of U.S.-China trade relations.
A Game-Changing Reversal in U.S. Policy
The U.S. government’s decision to green-light export licenses for Nvidia’s H20 AI accelerator and AMD’s MI308 chips represents a dramatic departure from the Trump administration’s earlier policies aimed at curbing China’s access to advanced AI technology. Initially implemented in 2022, these restrictions were designed to prevent China from leveraging cutting-edge AI chips for potential military applications. The tightened controls in April 2025 specifically targeted Nvidia’s H20 chip, requiring a U.S. permit for sales to China. However, recent trade negotiations have softened this stance, reflecting a broader thawing of U.S.-China relations.
This policy shift stems from high-level trade talks held in Geneva and London, where both nations sought to balance their technological and economic interests. U.S. Treasury Secretary Scott Bessent acknowledged that the easing of restrictions on Nvidia’s H20 chips was a strategic “negotiating chip” used to secure access to China’s rare-earth minerals, critical for high-tech manufacturing. This quid pro quo highlights the intricate interplay between technology exports and global supply chains, with both sides making concessions to achieve mutual benefits.
Nvidia’s Strategic Victory
For Nvidia, this development is a monumental win, particularly for its Chief Executive Officer, Jensen Huang. Huang, a vocal critic of U.S. chip export curbs, has previously labeled them a “failure” for inadvertently boosting competitors like Huawei Technologies Co. By securing approval to ship the H20 AI accelerator to China, Nvidia is poised to recover a significant portion of its projected $15 billion in fiscal 2026 data center revenue, including $4-5 billion expected in the second half of the year and part of the $8 billion in unshipped second-quarter orders.
Nvidia’s H20 chip was specifically designed to comply with earlier U.S. export restrictions, offering a less advanced but still powerful solution for China’s AI market. Despite these efforts, the Trump administration’s April 2025 restrictions temporarily halted H20 sales, prompting Nvidia to develop another compliant chip, the RTX PRO. The recent approval to resume H20 shipments not only restores Nvidia’s ability to fulfill previously written-off orders but also reinforces its dominance in the global AI hardware market.
Huang’s proactive engagement with both U.S. and Chinese leaders underscores Nvidia’s strategic focus on China. During a recent visit to Beijing for a government-sponsored conference, Huang announced the approval on Chinese state broadcaster CCTV. His upcoming media briefing on July 16, 2025, is expected to shed further light on Nvidia’s plans for the Chinese market, where it generated $17 billion in revenue in the fiscal year ending January 26, 2025—13% of its total sales.
AMD’s Parallel Success
AMD, a key player in the semiconductor industry, has also received assurances from the U.S. Commerce Department to resume shipments of its MI308 chips to China, pending export license approvals. This development has sparked optimism among investors, with AMD’s shares surging by as much as 8.5% in New York trading following the announcement. The MI308, like Nvidia’s H20, is designed to meet U.S. export regulations while delivering robust AI performance, making it a valuable asset for Chinese tech firms.
AMD’s ability to re-enter the Chinese market aligns with its broader strategy to compete in the rapidly growing AI sector. The company’s chips are critical for training and deploying AI models, and access to China’s vast market will bolster AMD’s revenue and market share. This move also positions AMD as a formidable competitor to Nvidia, particularly as Chinese companies seek diverse suppliers to reduce reliance on any single provider.
Market Reactions and Industry Impact
The announcement of resumed AI chip sales to China has reverberated across global markets. Nasdaq futures surged, reflecting investor confidence in the semiconductor sector’s growth prospects. In Hong Kong, Chinese tech stocks also reacted positively, with Alibaba Group Holding Ltd.’s shares rising by up to 6% and the Hang Seng Tech Index climbing 2.2%. Data center operators, such as Beijing Sinnet Technology Co., saw gains of up to 8.4%, underscoring the broader impact on China’s AI ecosystem.
Vey-Sern Ling, managing director at Union Bancaire Privee, described Nvidia’s H20 approval as “obviously positive” for the company, the AI semiconductor supply chain, and Chinese tech platforms building AI capabilities. The decision is also seen as a step forward in U.S.-China relations, signaling a willingness to collaborate on critical technology issues while addressing mutual economic interests.
For Chinese companies like DeepSeek and Alibaba, access to Nvidia’s H20 and AMD’s MI308 chips is a significant boon. Despite Huawei’s advancements in semiconductor technology, many Chinese firms still prefer Nvidia’s hardware due to its industry-leading CUDA computing platform. These chips will enable Chinese tech giants to accelerate the development of AI services, positioning them to compete with global leaders like OpenAI.
The Broader Context of U.S.-China Trade Relations
The easing of chip export restrictions is part of a broader trade truce between Washington and Beijing, driven by recent diplomatic efforts. U.S. Secretary of State Marco Rubio highlighted a “strong desire” for a meeting between President Donald Trump and Chinese President Xi Jinping later in 2025, signaling a commitment to dialogue. The lifting of restrictions on chip design software and other technologies, coupled with China’s increased exports of rare-earth minerals, reflects a delicate balance of concessions aimed at stabilizing bilateral relations.
However, this détente has not been without controversy. A bipartisan pair of U.S. senators recently urged Jensen Huang to avoid meetings with Chinese companies tied to military or intelligence entities or those on the U.S. restricted export list. This caution underscores the ongoing tension between economic cooperation and national security concerns, particularly regarding AI’s potential military applications.
China’s Ministry of Foreign Affairs spokesman Lin Jian emphasized that export curbs destabilize global supply chains and serve no one’s interests. This sentiment reflects China’s broader push to depoliticize trade and technology issues, advocating for open markets and collaboration in the global tech ecosystem.
Nvidia’s Resilience Amid Challenges
Nvidia’s ability to navigate U.S. export restrictions highlights its adaptability and strategic foresight. Since the initial curbs in 2022, Nvidia has consistently developed new processors tailored for the Chinese market. The H800, introduced shortly after the 2022 restrictions, was banned by the Biden administration in 2023. Nvidia responded with the H20, which faced potential restrictions before the recent approval. The RTX PRO, described as “fully compliant” with U.S. regulations, further demonstrates Nvidia’s commitment to maintaining its foothold in China.
This resilience has contributed to Nvidia’s historic achievement of becoming the first company to reach a $4 trillion market value in July 2025. The milestone underscores Nvidia’s central role in the global AI infrastructure boom, driven by demand for its hardware in applications ranging from generative AI to autonomous systems.
The Road Ahead for Nvidia and AMD
As Nvidia and AMD prepare to resume AI chip sales in China, both companies face opportunities and challenges. For Nvidia, the H20’s approval could unlock billions in revenue, but it must navigate heightened competition from Huawei and other domestic Chinese chipmakers. Huang’s ongoing discussions with Chinese leaders, including the commerce minister, will likely focus on strengthening Nvidia’s market position while addressing regulatory and competitive dynamics.
AMD, meanwhile, is well-positioned to capitalize on China’s demand for AI hardware. The MI308’s approval will enhance AMD’s competitiveness in the AI chip market, but like Nvidia, it must contend with evolving U.S. export policies and China’s push for semiconductor self-sufficiency.
The broader AI semiconductor industry stands to benefit from this development, as increased access to China’s market will drive innovation and investment. For Chinese tech firms, the availability of Nvidia and AMD chips will accelerate AI development, fostering competition with global players and enhancing China’s role in the AI ecosystem.
Nvidia & AMD AI Chip Sales to China: Key Developments at a Glance
| Topic | Details |
|---|---|
| Major Update | Nvidia and AMD to resume AI chip sales to China after securing US export license approvals. |
| Approved Chips | Nvidia H20 AI Accelerator AMD MI308 AI Processor |
| Export Clearance By | U.S. Department of Commerce — green-lighted licenses after earlier Trump-era curbs. |
| Reason for Reversal | Thaw in US-China relations + strategic trade truce involving rare earths & tech exports. |
| Potential Revenue Impact | Nvidia could recover up to $15 billion in FY2026 revenue — with $4–5 billion in H2. |
| Market Reaction | Nvidia stock surged 5%, AMD up 8.5% Alibaba up 6%, Hang Seng Tech Index rose 2.2% |
| CEO Spotlight | Nvidia’s Jensen Huang: Called chip curbs a “failure” — seen as winner of policy reversal. |
| Huang’s China Visit | Second 2025 visit — will hold media briefing in Beijing on July 16 to discuss AI strategies. |
| US Political Pushback | Bipartisan U.S. Senators caution Huang against meeting PRC military-linked firms. |
| China’s Stand | Chinese Foreign Ministry: “Opposes weaponizing tech trade — curbs hurt global supply chains.” |
| Background of Export Bans | Since 2022, US restricted Nvidia’s top chips like H800, prompting creation of China-compliant versions like H20 & RTX PRO. |
| Strategic Trade-offs | Treasury Secretary admits: H20 clearance part of negotiation chip in Geneva & London trade talks. |
| Why It Matters Globally | Restores AI chip access for China amid growing demand by firms like Alibaba, DeepSeek, and Sinnet Technology. |
| Nvidia’s Global Role | First company to hit $4 trillion market cap — driving AI infrastructure globally post-ChatGPT boom. |
| China Revenue Share | China contributed $17 billion (13%) to Nvidia’s total revenue in FY ending Jan 2025. |
| CUDA Advantage | Despite Huawei’s rise, Chinese firms still prefer Nvidia due to its CUDA AI ecosystem. |
Conclusion: A Win for Innovation and Diplomacy
The U.S. government’s decision to approve Nvidia’s H20 and AMD’s MI308 chip sales to China marks a significant milestone in the global semiconductor industry. This policy shift not only restores a critical revenue stream for both companies but also signals a thaw in U.S.-China trade relations. For Nvidia’s Jensen Huang, it’s a vindication of his advocacy for open markets and a testament to Nvidia’s strategic adaptability. For AMD, it’s an opportunity to strengthen its position in the AI chip market.
As the AI revolution continues to reshape industries, the resumption of chip sales to China will have far-reaching implications. From bolstering Chinese tech firms to driving global market growth, this development underscores the interconnectedness of technology, trade, and diplomacy. With Nvidia and AMD leading the charge, the future of AI innovation looks brighter than ever.
Frequently Asked Questions (FAQ): Nvidia & AMD AI Chip Sales Resumption in China
Q1. Why are Nvidia and AMD resuming AI chip sales in China now?
Answer:
Nvidia and AMD are resuming sales of certain AI chips to China after receiving assurances from the U.S. Commerce Department that export licenses would be granted. This marks a major policy reversal from earlier Trump-era restrictions aimed at curbing China’s AI development.
Q2. Which AI chips have been approved for export to China?
Answer:
- Nvidia H20 AI Accelerator
- AMD MI308 AI Chip
These chips were redesigned to comply with U.S. export regulations and now have clearance for shipment to China after previously being restricted.
Q3. How much revenue could Nvidia recover from this move?
Answer:
According to Bloomberg Intelligence, Nvidia could recover up to $15 billion in lost revenue for fiscal 2026. This includes $4–5 billion in sales expected in the second half of the fiscal year and a portion of $8 billion in previously unshipped Q2 orders.
Q4. What triggered this sudden U.S. policy shift?
Answer:
The shift came amid thawing U.S.-China relations, and was influenced by broader negotiations around rare-earth exports and chip design software. Despite earlier denials, Treasury Secretary Scott Bessent confirmed the H20 chip was used as a negotiating tool in trade talks held in Geneva and London.
Q5. What does Nvidia CEO Jensen Huang say about the chip curbs?
Answer:
Jensen Huang has criticized the U.S. chip curbs, calling them a “failure” that inadvertently boosted competitors like Huawei. The recent approval is viewed as a personal and strategic win for him as he navigates geopolitical challenges to preserve Nvidia’s dominance in AI hardware.
Q6. How did the market react to the announcement?
Answer:
- Nvidia stock surged 5%
- AMD rose 8.5%
- Alibaba jumped 6% in Hong Kong
- Beijing Sinnet Technology surged 8.4%
- Hang Seng Tech Index gained 2.2%
This highlights a positive outlook across both U.S. and Chinese markets for the semiconductor and AI industries.
Q7. What is Nvidia’s market position in the global AI race?
Answer:
Nvidia recently became the first company to hit $4 trillion in market value, cementing its role as the backbone of global AI infrastructure, especially post-ChatGPT. Its CUDA computing ecosystem remains unmatched, driving demand even from Chinese tech giants.
Q8. Why is China such an important market for Nvidia?
Answer:
China contributed $17 billion (13% of total revenue) to Nvidia’s earnings in FY 2025. Despite local rivals like Huawei, Chinese firms still rely on Nvidia’s superior AI chips and CUDA platform to train and operate large-scale AI systems.
Q9. What are the political risks surrounding this development?
Answer:
U.S. senators have warned Nvidia’s CEO against engaging with Chinese companies linked to military or intelligence bodies. Nvidia must tread carefully to balance market expansion with regulatory scrutiny and national security concerns.
Q10. What’s next for Nvidia in China?
Answer:
Jensen Huang will host a media briefing in Beijing on July 16, following his earlier trip in April. He is expected to meet with Chinese officials and continue strengthening Nvidia’s footprint in a country that remains crucial to its global AI strategy.