Nvidia will soon resume sales of its AI chips in China
Nvidia will soon resume selling its AI chips in China.
As we mentioned back in April, the U.S. might have shot itself in the foot by blocking Nvidia from selling its GPU chips, which are used as AI accelerators in China. This part of the story is easy to understand since it is well known that the U.S. seeks to prevent China from obtaining advanced chips amid concerns that they will be used to improve the country's military.
But this ban resulted in Huawei receiving more orders inside China for its Ascend series of AI accelerators. Many of these sales would have gone to Nvidia except for the fact that the U.S. company, as noted, is banned from selling its GPUs in China. But in a statement released last night, Nvidia, the world's most valuable publicly traded company, says that it is filing applications with the U.S. government to resume shipping its H20 chips to China. The company expects to receive the licenses soon.
The H20 chips that Nvidia hopes to sell in China are the most capable it can sell in the country. That is because of laws enacted by both President Donald Trump during his first term, and President Joe Biden. These chips are not as powerful as Nvidia's GPUs sold outside China.
Nvidia CEO Jensen Huang is currently in Beijing and set to speak during an event being held in the city tomorrow. The company released a statement that says, "The U.S. government has assured Nvidia that licenses will be granted, and Nvidia hopes to start deliveries soon." Huang has said that Nvidia could lose its position as a global AI leader if it remains unable to sell its chips in China.
A report published today says that Chinese companies are rushing to place orders for Nvidia's GPU. These orders will have to be sent to the U.S. government for approval. Among Chinese firms reportedly getting ready to submit orders are TikTok parent ByteDance and Chinese conglomerate Tencent. For the fiscal year ended January 26th, 2025, Nvidia took in $17 billion in revenue from China, equivalent to 13% of the company's global sales.
Chinese tech companies still favor Nvidia's computing platform, known as CUDA (Compute Unified Device Architecture). CUDA allows developers to take advantage of the parallel processing used by Nvidia's GPUs. This type of processing allows multiple tasks to be handled simultaneously while using multiple cores. It is critical for AI, where billions and trillions of operations are handled at the same time.
Investors are reacting to this new by pushing Nvidia's shares up 3.98% to $170.60. The company is now worth $4.16 trillion dollars.
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