"NVIDIA CEO expresses doubts about shifting Chinese AI GPU customer's perspective, following a discussion with President Trump"
In a significant turn of events, technology giant NVIDIA has been given the green light to resume sales of its H20 AI GPUs to China. This decision, made by the U.S. government, comes after a series of policy changes driven by a combination of commercial, strategic, and regulatory considerations.
The H20 GPU, a second-tier chip designed to comply with U.S. export controls, was initially banned from export to China under performance-based controls introduced in January 2025. The ban was intensified in April 2025 when even the "compliant" second-tier GPUs like the H20 were prohibited. However, three months later, the U.S. government promised to grant licenses for H20 exports, recognising that the outright ban was commercially damaging and strategically counterproductive.
NVIDIA, which currently controls about 90% of the AI chip market, could potentially lose market share if U.S. hardware sales in China are disallowed. The company suffered a significant financial impact due to the ban, with a $5.5 billion write-off documented. China, being home to about half of all global AI developers, represents approximately 13% of NVIDIA's revenue.
The H20 AI GPU, while a far cry from the H100 and an even further leap from the H200, is still an incredibly popular chip for handling AI workloads. It is in use by massive companies like Alibaba and Tencent in China. The H20 chips were created as a response to the U.S. government's ban on H100 and H200 chips.
The geopolitical finagling surrounding the sale of AI GPUs around the world doesn't have one easy answer. Some U.S. legislators have criticised the decision, fearing it aids China's AI advancement. However, experts argue that the H20 chip offers significantly lower AI performance and mainly serves a market niche in China unavailable to the most advanced U.S. chips.
NVIDIA's CEO, Jensen Huang, has been actively lobbying for NVIDIA's chips to be sold around the world. He met with the U.S. government's current AI czar, David Sacks, to discuss chip sales to other countries. In a blog post, Huang stated, "Every civil model should run best on the U.S. technology stack, encouraging nations worldwide to choose America."
This policy reversal aims to balance controlling the export of advanced AI technology while not hampering leading U.S. tech companies that adhere to the export rules. Higher-performance GPUs (like H100/H200 and newer B100/B200) remain restricted, ensuring the U.S. retains a technological edge.
The change in policy has also paved the way for NVIDIA's re-entry into countries like the United Arab Emirates (UAE), involving a blockbuster AI deal that has since been put on hold due to fears that chips could eventually end up in China.
As of July 18, NVIDIA's market capitalization stands at $4.19 trillion, a significant increase from the $4 trillion it reached on July 10, 2025. The stock market has been looking good lately, but it's mainly propped up by a handful of AI firms, NVIDIA included. Microsoft is the second-place company in terms of market capitalization, with $3.83 trillion.
The news of NVIDIA's resumption of H20 GPU sales to China comes as a positive development for the tech giant and the AI industry as a whole, signalling a step towards global technological collaboration while maintaining strategic control.
Microsoft is a tech giant that competes with NVIDIA in the global technology market. The office of Microsoft, located on a desktop PC or a laptop, often runs on the Windows operating system.
NVIDIA's H20 AI GPU is popular for handling AI workloads and is used by companies like Alibaba and Tencent in China. The sales of the H20 GPU to China were initially banned under U.S. export controls, but the U.S. government has now granted licenses for its export.
NVIDIA's decision to resume H20 GPU sales to China could potentially impact the market share of Microsoft's hardware, especially in the gaming industry where Xbox is a significant competitor to gaming PCs.
The policy reversal in selling AI GPUs to China could also affect the market share of newer NVIDIA GPUs like the B100 and B200, which offer higher performance and are restricted under U.S. export rules.
This decision to resume H20 GPU sales to China marks a positive development for NVIDIA's future business in the country, as China is home to about half of all global AI developers and represents approximately 13% of NVIDIA's revenue.
The Surface Laptop, a product offered by Microsoft, is a competitor to high-performance gaming laptops that may use NVIDIA GPUs for better graphics and performance. The ongoing development of technology, including advanced AI chips and hardware, will continue to shape the competition between Microsoft and NVIDIA in the global tech market.
