Khaberni -The American tech giant NVIDIA announced Tuesday that it will resume selling H20 artificial intelligence chips to China after the United States committed to lifting licensing restrictions that had halted exports.
NVIDIA, headquartered in California, produces some of the world's most advanced semiconductors, but it is prohibited from exporting some of its advanced chips to China, fearing they could be used by Beijing to develop military capabilities.
The company developed the "H20," a less powerful version of its artificial intelligence processing units, specifically for export to China. However, this was frozen after President Donald Trump's administration tightened export licensing requirements in April.
According to the "Agence France-Presse," the company said in a statement on Tuesday that it had submitted "applications to resell the NVIDIA H20 graphics processing unit."
The company added, "The U.S. government has confirmed for NVIDIA that licenses will be granted, and NVIDIA hopes to begin deliveries soon."
The company's CEO Jensen Huang said in a video broadcast by China's official "CCTV" channel on Tuesday, "The U.S. government has authorized us (to submit) licenses to begin shipping H20, so we will start selling it to the Chinese market."
He added, "I look forward to shipping H20 very soon, and I am very pleased with this very good news."
Chinese expert Zhang Gupin noted that the resumption of exports will achieve "significant revenue growth for NVIDIA, offsetting losses it incurred due to the previous ban."
He told Agence France-Presse that this move will also alleviate trade tension concerning global semiconductor supply chains.
However, he emphasized that Chinese companies will continue to focus on developing chips locally, pointing out that "Trump's administration was prone to sudden policy shifts, making it difficult to assess the sustainability of such openness."
The official Chinese channel reported in a report that Huang will attend a crucial assembly related to supply chains on Wednesday, during his third visit to the country this year, according to "CCTV."
China is a vital market for NVIDIA. However, U.S. export restrictions in recent years have placed the company in fierce competition with local groups such as Huawei.
Huang, an electrical engineer, told Chinese Deputy Prime Minister He Lifeng during his visit to Beijing in April that he "views the potential of the Chinese economy positively," according to Xinhua News Agency.
The official Chinese agency quoted Huang as saying that he "is ready to continue engaging in the Chinese market and playing a positive role in promoting trade cooperation between the United States and China."
The U.S. restrictions came at a time when the Chinese economy was suffering from local consumer hesitation in spending and a deep crisis in the real estate sector affecting growth.
President Xi Jinping has urged making China more self-reliant amid rising uncertainties in external factors.
The "Financial Times" reported in May that NVIDIA plans to build a research and development center in Shanghai, China. Neither the company nor city authorities confirmed these reports to Agence France-Presse at the time.
Two sources told Reuters that Chinese companies are rushing to buy NVIDIA's H20 artificial intelligence chips, which the company said it plans to resume selling to mainland China.
The White House, which had previously expressed concern that the Chinese military could use the AI chips in weapon development, did not respond to a request for comment.
The sources said that Chinese companies had rushed to apply to purchase the chips, which NVIDIA must submit to the U.S. government for approval.
They added that the giant Chinese companies ByteDance and Tencent are in the process of submitting applications.
One of the sources said that a pivotal aspect of this process is the "whitelist" created by NVIDIA for Chinese companies to register for potential purchasing operations.
Neither ByteDance nor Tencent responded to requests for comment. NVIDIA also did not respond to a request for comment on the "whitelist."
NVIDIA, which criticized the export restrictions imposed by President Donald Trump's administration in April that prevented it from selling H20 chips in China, said it had developed a new model specifically designed to comply with regulatory rules in the Chinese market.
This step to resume chip sales comes amid easing tensions between the United States and China as Beijing relaxed restrictions on the export of rare earth metals, and the United States allowed the resumption of chip design software services in China.
Qi Hui, the semiconductor research director at Omdia, said, "The uncertainty between the United States and China remains high, and Chinese companies will continue to diversify their options to better protect the integrity of their supply chain despite the cessation of the ban on the H20 chip."
NVIDIA developed these chips specifically for the Chinese market after the United States imposed export restrictions for national security reasons in late 2023.
Matt Britzman, a senior equity analyst at Hargreaves Lansdown, said that the possibility of new licenses could increase NVIDIA's revenues by between $15 billion and $20 billion this year, depending on when the licenses are granted and how quickly they are issued.
According to the latest annual report from NVIDIA, the company's revenues from China were $17 billion in the year ended January 26, which represents 13 percent of total sales.
