Nvidia Breaks Through US-China Wall -- AI Chip Exports Back in Play

After months of escalating chip restrictions, Nvidia NVDA said it received assurance from US officials that export licenses for its H20 AI chips will be approved a pivotal shift that could restore billions in revenue once thought lost. The company had initially designed the H20 to comply with earlier US-China tech curbs, only to see those rules tighten under Trump's April order. Now, with approval seemingly back in play, Nvidia may be poised to recover a key growth lever in Asia. AMD (AMD) isn't far behind either it confirmed the Commerce Department signaled support for renewed sales of its MI308 chips to China, pending final licensing. The market didn't wait: Nvidia shares surged as much as nearly 4.8%, while AMD jumped 7.2% as of 10.31am today.

Behind the scenes, this reversal looks like part of a broader geopolitical mosaic. Treasury Secretary Scott Bessent admitted export controls had been a negotiating chip during recent trade talks in Geneva and London, even though officials had previously denied any quid pro quo. The policy shift follows China's decision to ease restrictions on rare-earth exports, a move US negotiators have been angling for over months. CEO Jensen Huang currently in Beijing has long argued that restricting Nvidia chips only fuels rivals like Huawei and weakens US leverage. Nvidia's own estimates suggest up to $15 billion in data center revenue was at risk, including $45 billion from H20 orders originally expected this year.

The stakes couldn't be higher. Nvidia recently hit a $4 trillion market cap, becoming the poster child of the post-ChatGPT AI boom. Now, the H20's return could reopen a critical channel to Chinese hyperscalers like Alibaba and DeepSeek, who still prefer Nvidia's hardware for their next-gen models. Even with Washington maintaining that no intent exists to boost China's AI capabilities, the landscape just shifted. And with Huang warning that Nvidia's market share in China has already dropped from 95% to 50%, this development could be the inflection point that brings a chunk of it back.