U.S. Clears Nvidia H20 Chip Exports to China: Strategic Shift

The U.S. Commerce Department has approved applications for Nvidia to resume exporting its H20 AI chip—described as the company’s “fourth best” GPU—to China.

Commerce Secretary Howard Lutnick emphasized that the decision allows moderate technology transfer while retaining dominance in cutting-edge hardware. The move stems from recent U.S.–China trade negotiations that included agreements on rare earth elements and magnets, signaling a strategic recalibration of tech diplomacy. Designed to comply with Biden-era restrictions, the H20 GPU is less advanced than Nvidia’s top-tier chips such as Blackwell and Vera Rubin. Still, it remains powerful enough to meet the needs of China’s AI developers, including ByteDance, Alibaba, and Tencent, who have already placed orders.

Key Highlights

• U.S. approves H20 chip exports to China—this GPU is Nvidia’s “fourth best.”
• Approval linked to rare earth and magnet trade negotiations.
• Nvidia stock surged 4–5percent; China accounted for $17B in annual revenue.

The policy aims to maintain China's reliance on U.S. tech infrastructure while preventing its access to the most advanced semiconductor capabilities.

The announcement caused Nvidia shares to jump between 4 percent and 5 percent in trading, reflecting Wall Street optimism and the critical revenue opportunity—China became a $17 billion market for Nvidia last fiscal year. The policy pivot comes after Nvidia’s CEO Jensen Huang met with President Trump, lobbying that continued U.S. chip access is essential to maintaining global AI leadership.

Also Read: Nvidia Faces China GPU Rivalry After US Chip Ban

Although legislators on both sides voiced concerns over national security, the administration framed the move as a calculated risk: sell moderate chips to ensure developer “addiction” to U.S. tech and hedge against China’s push to build advanced alternatives using domestic means. It’s a strategic balancing act between economic benefit and geopolitical control.