Nvidia to Resume H20 AI Chip Sales in China After CEO Meets Trump

Nvidia Resumes H20 AI Chip Sales to China Amid Shifting US-China Tech Relations

Chinese firms are reportedly rushing to place orders for Nvidia's H20 AI chips as the company prepares to resume sales to mainland China. This move follows a meeting between Nvidia CEO Jensen Huang and President Donald Trump, signaling a potential shift in US-China technology relations. Nvidia expects to receive US government licenses soon, which could generate an additional $15 billion to $20 billion in revenue this year.

Background: Nvidia's Role in AI

Since the advent of generative AI with the launch of ChatGPT in 2022, Nvidia's financial performance has been closely tied to the demand for specialized hardware capable of efficiently executing AI models. Nvidia's data center GPUs are designed for the massive parallel computations required by neural networks, processing numerous matrix operations simultaneously.

The H20 Chip and Export Restrictions

The H20 chip is Nvidia's most advanced AI processor legally available in China. However, it possesses less computing power than versions sold in other markets due to export restrictions imposed by the US in 2022. Nvidia is currently prohibited from selling its most powerful GPUs in China. Despite these limitations, Chinese tech giants like ByteDance and Tencent are reportedly eager to secure H20 chips, placing orders through an approved list managed by Nvidia.

CEO's Perspective on the Chinese Market

Nvidia CEO Jensen Huang emphasized the importance of the Chinese market during his visit to Beijing. He stated that China is "massive, dynamic, and highly innovative, and it's also home to many AI researchers." Huang stressed the crucial role of American companies establishing a presence in the Chinese market.

Shift in US-China Technology Policy

The resumption of H20 sales signifies a change in US-China technology relations. Previously, in April, the US government imposed an export license requirement that effectively banned these chips, leading Nvidia to incur a $4.5 billion write-off for excess inventory and purchase obligations. In the fiscal year ending January 26, Chinese sales contributed $17 billion to Nvidia's revenue, accounting for 13 percent of its total sales.

Future Offerings and Market Impact

In addition to the H20, Nvidia announced plans to introduce a new "RTX Pro" chip model specifically designed to comply with Chinese regulatory rules. While details about its specifications remain undisclosed, this move further indicates Nvidia's commitment to navigating the complex regulatory landscape in China.

Author and Related Content

This article was written by Benj Edwards, Ars Technica's Senior AI Reporter. He is also a tech historian with nearly two decades of experience. His work focuses on AI, and he has a passion for vintage computers and music.

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