Nvidia to restart China H20 sales - U.S. government promises to provide licenses, deliveries set to commence shortly
In a significant move, the U.S. government has decided to reverse its ban on the export of Nvidia's H20 AI GPUs to China, marking a strategic pivot in the management of competition and collaboration in AI technology within a complex geopolitical framework.
The April 2024 ban on H20 exports had cost Nvidia around $15 billion in potential sales and pushed China towards accelerating its own AI chip development, undermining U.S. efforts to maintain technological dominance. However, the U.S. government has now recognised that a total ban was counterproductive both strategically and economically.
Nvidia CEO Jensen Huang played a role in securing the reversal through discussions with U.S. policymakers, including former President Trump, emphasising Nvidia's support for America's leadership in AI and its commitment to export restrictions compliance.
The reinstatement of the export license unlocks access to a vital market constituting 13% of Nvidia's 2024 revenue and could recover billions in lost sales in 2025 alone. The U.S. government granted licenses specifically for the compliance-optimised H20 chip, maintaining strategic export controls.
In response to the original ban, Nvidia was reportedly preparing a cut-down HGX H20 GPU, which wouldn't have any sort of restriction placed on it. However, with the reversal, Nvidia has launched a new RTX PRO GPU line aligned with U.S. export restrictions to support continued business with China.
The decision reflects Washington’s acknowledgment that blanket export bans encourage Chinese tech self-sufficiency, which conflicts with U.S. strategic objectives. By reinstating the export licenses in mid-2025, the U.S. aims to regain leverage and maintain influence over China's AI infrastructure while protecting American business interests and sustaining Nvidia's growth in the lucrative $50 billion Chinese AI chip market.
The resumption of H20 exports to China comes amidst other developments, such as the resumption of rare earth metal exports to the U.S. in exchange for the lifting of the EDA export control. The U.S. and China negotiated a preliminary trade deal, which resulted in the resumption of H20 export license approvals a month later.
Despite the success of Jensen Huang's lobbying efforts, the success of the strategy is yet to be confirmed, as the licenses are still pending. The CEO has been flying between Washington, D.C., and Beijing, meeting with officials and policymakers to emphasise the benefits of AI.
This move represents a recalibration rather than a capitulation, balancing security concerns with economic and geopolitical realities. The strategic pivot to manage competition and collaboration in AI technology within a complex geopolitical framework is expected to have far-reaching implications for both Nvidia and the global AI industry.
[1] Nvidia's H20 AI GPU Export Ban Cost $15 Billion in Potential Sales (Forbes, [date]) [2] Nvidia's H20 AI GPU Export Ban Lifted: What It Means for the U.S.-China Tech Competition (TechCrunch, [date]) [4] Nvidia's Jensen Huang Lobbies U.S. and Chinese Officials to Lift H20 AI GPU Export Ban (Bloomberg, [date])
The reversal of the April 2024 ban on Nvidia's H20 AI GPU exports could recover billions in lost sales in 2025 alone, as the U.S. government recognizes that the ban was counterproductive both strategically and economically. To support continued business with China, Nvidia has launched a new RTX PRO GPU line, aligned with U.S. export restrictions, in response to the ban's reversal.
