The US has just reversed its policy on AI chip exports. After blocking Nvidia from selling its H20 chips to China in April, Washington now says the sales can resume.
Nvidia said in a blog post: “The US government has assured Nvidia that licenses will be granted, and Nvidia hopes to start deliveries soon.”
Huang told reporters in Washington:
“General-purpose, open-source research and foundation models are the backbone of AI innovation. We believe that every civil model should run best on the U.S. technology stack, encouraging nations worldwide to choose America.”
But here’s the catch: this isn’t just about semiconductors.
US Commerce Secretary Howard Lutnick let slip that the chip approval is tied to China’s rare earth exports.
“We put that in the trade deal with the magnets,” Lutnick told Reuters.
For context, China had stopped shipping these essential minerals to the US back in March.
The US is easing AI-chip rules while China loosens its hold on rare-earth exports. Those minerals are vital for fighter jets, wind turbines and electric cars. It also explains how this flip-flop happened… In January, Lutnick said Nvidia should “stop helping” China. Then, a few months later, in April, the administration banned the H20. Now, in July, the decision has been reversed.
It’s also important to note that the H20, whilst powerful, isn’t Nvidia’s best chip.
After the Biden administration limited super-advanced chips from being exported to China, Nvidia engineered the H20 as a China-only product. The company’s more advanced chips, including the Blackwell line, H100, and H200, are still off-limits to Chinese customers.
The game of cat and mouse Nvidia has played since 2022:
| Date | US Gov Action | Nvidia Response |
|---|---|---|
| Sep 2022 | Informs Nvidia of A100/H100 AI chip exports to China | Releases weaker A800/H800 |
| Oct 2023 | Rule tightens again (performance-density test) | Starts new H20/L20/L2 line intended for the Chinese market |
| Apr 2025 | Ban expands to H20 | Warns of $5 billion write-off |
| Jul 2025 | License path opened | Announces restart of H20 sales to China |
Each time regulators raised the bar, Nvidia shaved power or bandwidth to slip under it. The H20 cuts multi-GPU links and peak tensor math but still packs 96 GB of fast HBM3 memory. Regulators evidently view that as a tolerable middle ground.
Huang also announced a fully compliant NVIDIA RTX PRO GPU that “is ideal for digital twin AI for smart factories and logistics.”
As reported by Bloomberg, AMD caught a break too. They’ll restart shipping their MI308 chips to China once licenses come through.
