Chinese firms are scrambling to buy Nvidia H20 artificial intelligence chips after the US indicated that it would grant licences soon for the company to resume AI chip sales to China, according to sources as quoted by Reuters. A statement by the company earlier said Nvidia planned to resume sales to the mainland days after its CEO, Jensen Huang met U.S. President Donald Trump.
The world’s most valuable firm is filing applications with the U.S. government to resume sales to China of the H20 graphics processing unit (GPU), and expects to get the licences soon, Nvidia said in a statement. “The U.S. government has assured Nvidia that licenses will be granted, and Nvidia hopes to start deliveries soon,” it added.
Chinese companies have scrambled to place orders for the chips, which Nvidia would then need to send to the U.S. government for approval, the sources familiar with the matter said. They added that internet giants ByteDance and Tencent are in the process of submitting applications. Central to the process is a “whitelist” established by Nvidia that allows Chinese companies to register for potential purchases, one of the sources said.
The move to resume sales of the H20 chips comes amid easing tensions between Washington and Beijing, with China relaxing controls on rare earth exports and the United States allowing chip design software services to restart in China.
The H20 chip was developed specifically for the Chinese market after U.S. export restrictions were imposed in late 2023. The AI chip was Nvidia’s most powerful legally available product in China until it was effectively banned by Washington in April. The H20 ban forced Nvidia to write off US$5.5 billion in inventories, as well as US$15 billion in sales. China generated US$ 17 billion in revenue for Nvidia in the fiscal year ending January 26, accounting for 13% of the company’s total sales, based on its latest annual report.
ByteDance, Tencent, Nvidia and the White House did not respond to press requests for comment.
Nvidia, which has criticised the export restrictions the Trump administration imposed in April that stopped it from selling its H20 chip in China, also said it has introduced a new model tailored to meet regulatory rules in the Chinese market.
Nvidia’s AI chips have been a key focus of U.S. export controls designed to keep the most advanced chips out of Chinese hands over national security concerns. The U.S. government has expressed concern that the Chinese military could use AI chips to develop weapons.
“The uncertainties between the U.S. and China remain high and despite a pause in H20’s ban, Chinese companies will continue to diversify their options to better protect their supply chain integrity,” said He Hui, research director of semiconductors at Omdia, as quoted by Reuters.
Huang in Beijing
Huang who is in Beijing now is scheduled to hold a media briefing tomorrow at a supply chain expo.
“The Chinese market is massive, dynamic, and highly innovative, and it’s also home to many AI researchers. Therefore, it is indeed crucial for American companies to establish roots in the Chinese market,” Huang told Chinese state broadcaster CCTV today. Huang has consistently highlighted China as a critical market for Nvidia’s growth.
Huang’s visit is being closely watched in both China and the United States, where a bipartisan pair of senators last week sent a letter to the CEO asking him to abstain from meeting companies that are working with military or intelligence bodies, as well as those named on the United States’ restricted export list.
Nvidia has faced increased competition from Chinese tech giant Huawei and other makers of GPUs – the chips used to train artificial intelligence. But Chinese companies, including big tech firms, still desire Nvidia chips due to the company’s computing platform known as CUDA.
Nvidia also announced the development of a new AI chip designed specifically for China, called the RTX Pro GPU. The company described the model as “fully compliant” with U.S. export controls and suitable for digital twin AI applications in sectors such as smart factories and logistics.
In May, Reuters reported Nvidia was preparing to launch a new AI chip, based on the RTX Pro 6000D, in China at a significantly lower price point than the H20.
The GPU would be part of Nvidia’s latest generation Blackwell-architecture AI processors and was expected to be priced well below the H20 due to its weaker specifications and simpler manufacturing requirements, sources said.