Nvidia says it will resume sales of 'H20' AI chips to China

Beijing: US tech giant Nvidia announced Tuesday it will resume sales of its H20 artificial intelligence chips to China after Washington pledged to remove licensing restrictions that had halted exports.

The California-based company produces some of the world's most advanced semiconductors but cannot ship its most cutting-edge chips to China due to concerns that Beijing could use them to enhance military capabilities. Beijing has criticized Washington's curbs as unfair and designed to hinder its development.

Nvidia developed the H20 -- a less powerful version of its AI processing units -- specifically for export to China. However, that plan stalled when the Trump administration tightened export licensing requirements in April.

"The US government has assured Nvidia that licenses will be granted, and Nvidia hopes to start deliveries soon," the company said in a statement Tuesday, adding it was "filing applications to sell the Nvidia H20 GPU again."

CEO Jensen Huang, wearing his trademark black leather jacket, told reporters in a video published by Chinese state broadcaster CCTV: "I'm looking forward to shipping H20s very soon, and so I'm very happy with that very, very good news."

Defending the policy change, Trump's AI Czar David Sacks told CNBC the H20 was a "deprecated chip" that is "not anywhere close to the state of the art."

He said the reversal on the H20 came because Nvidia's Chinese rival Huawei was making "huge strides" and could potentially threaten Nvidia's market dominance.

China represents a crucial market for Nvidia, but recent US export restrictions have intensified competition from local players like homegrown champion Huawei.

"We don't want to sell China our latest greatest technology, but I do think we at least want to make it a little bit difficult for Huawei," Sacks said.

Sacks also said that the decision was linked to ongoing trade negotiations between Washington and Beijing that are locked in a bitter trade feud.