Nvidia on Tuesday said the U.S. government has assured the company that it could resume selling its H20 AI chip to China, signaling further de-escalation between the U.S. and China. However, two key questions remain unresolved.
During a visit to China, Nvidia CEO Jensen Huang said the company is filing applications to resume sales of the H20 GPU. The U.S. government has indicated that licenses will be granted, and Nvidia hopes to begin deliveries soon. Meanwhile, Huang also announced a new, fully compliant NVIDIA RTX PRO GPU, describing it as “ideal for digital twin AI in smart factories and logistics.”
On April 9, 2025, the U.S. government informed Nvidia that a license would be required for exports of the H20 chip—or any chips with equivalent memory bandwidth—to China or to companies headquartered there or with an ultimate parent in China. The license requirement remains in effect indefinitely. As a result, Nvidia previously estimated a charge of approximately $5.5 billion related to H20 inventory, though the final write-down came to around $4.5 billion.
After President Trump moved forward with the H20-related export controls in April, Nvidia designed a new, China-focused product—the RTX PRO. The company described it as “fully compliant,” meaning it falls below the technical thresholds outlined by U.S. regulators. It uses conventional GDDR7 memory instead of HBM and avoids advanced CoWoS packaging, resulting in a much cheaper product—roughly half the price of the H20. Generally speaking, this latest chip is a significantly downgraded version of the H20, which itself is already inferior to the H100, Nvidia’s legacy AI chip from three years ago.
Although the license approval for the H20 may arrive soon, two major concerns remain. First, there may be a potential quota on the H20 chip exports. Since the license requirement remains indefinite, this suggests tighter oversight on where the chips are going. U.S. officials are expected to scrutinize shipments to ensure that H20 chips do not end up in military applications. While Jensen Huang has stated that policymakers should not worry about the Chinese military using Nvidia chips—arguing that China can’t depend on products the U.S. can cut off at any moment—the H20 still holds strategic value. It could be used both to limit China’s AI development and as a bargaining chip in negotiations.
Second, even with H20 licenses approved, Nvidia is expected to continue promoting the RTX PRO in China. While the RTX PRO doesn’t require an export license, its inferior performance limits competitiveness. Huang has acknowledged that Nvidia’s market share in Asia has fallen from 95% to 50%, with the main beneficiary being Huawei. The slower rollout of high-end chips like the H20 won’t stop China from accelerating the development of its own domestic AI chips.
China generated $17 billion in revenue for Nvidia in the fiscal year ending January 26, accounting for 13% of the company’s total sales. However, as geopolitical tensions and ideological rifts between the U.S. and China persist, Nvidia—despite its $4 trillion market cap—could continue to face headwinds in the world’s second-largest economy.
