The United States has approved the sale of less sophisticated chips by Nvidia to China.
Nvidia Resumes AI Chip Sales to China Amidst Growing Competition and Geopolitical Complexities
In a significant development, Nvidia has resumed supplying Artificial Intelligence (AI) chips to China under new export licenses and large purchase orders, following a decision made by the Trump administration in mid-2025.
The U.S. initially cut off China from Nvidia chip supplies in October 2023, halting H20 AI chip shipments to China. However, the administration reversed course, granting Nvidia licenses to resume sales of a China-specific version of its H20 chips. Nvidia has since placed large orders, including 300,000 H20 chips with TSMC, awaiting U.S. export approval for these chips.
Despite this reopening of supply, Nvidia’s market share in China is forecasted to decline. This is due to intensified competition from domestic Chinese chipmakers like Huawei and Cambricon, who have gained ground while Nvidia’s H20 sales were paused. China is aggressively localizing AI chip production, with native suppliers expected to meet 55% of demand by 2027, further challenging Nvidia’s dominance.
President Trump considered allowing China to buy less advanced chips while keeping the best microchips for the U.S. a wise decision. The decision was made after a thorough examination of all factors, and purchases were discovered by Reuters in early 2024.
Regulatory and political tensions persist, with Beijing reportedly summoning Nvidia over security concerns, even as Washington uses chip export controls as leverage. Nvidia’s leadership views eased restrictions as preserving U.S. tech leadership, but a sliding scale of export controls and fresh hurdles remain likely.
In summary, Nvidia has resumed supplying AI chips to China under new export licenses and large purchase orders, but its market position is weakening amid growing Chinese competition and ongoing geopolitical complexities.
- The resumption of Nvidia's AI chip sales to China can be attributed to new export licenses and large purchase orders, but the general-news suggests that this move might not strengthen Nvidia's market position due to growing competition from domestic Chinese firms.
- Amidst the growing competition and geopolitical complexities, the finance sector looks keen to see how these fresh hurdles, such as regulatory and political tensions, will impact the profit margins of Nvidia, especially in the technology sector.
