Chinese Firms Rush For Nvidia Chips As US Prepares To Lift Ban

An anonymous reader quotes a report from Ars Technica: Chinese firms have begun rushing to order Nvidia's H20 AI chips as the company plans to resume sales to mainland China, Reuters reports. The chip giant expects to receive US government licenses soon so that it can restart shipments of the restricted processors just days after CEO Jensen Huang met with President Donald Trump, potentially generating $15 billion to $20 billion in additional revenue this year. Nvidia said in a statement that it is filing applications with the US government to resume H20 sales and that 'the US government has assured Nvidia that licenses will be granted, and Nvidia hopes to start deliveries soon.'

The H20 chips represent Nvidia's most capable AI processors legally available in China, though they contain less computing power than versions sold elsewhere due to export restrictions imposed in 2022. Nvidia is currently banned from selling its most powerful GPUs in China. Despite these limitations, Chinese tech giants, including ByteDance and Tencent, are reportedly scrambling to place orders for the lesser chip through what sources describe as an approved list managed by Nvidia. 'The Chinese market is massive, dynamic, and highly innovative, and it's also home to many AI researchers,' Reuters reports Huang telling Chinese state broadcaster CCTV during his visit to Beijing, where he is scheduled to speak at a supply chain expo on Wednesday. 'Therefore, it is indeed crucial for American companies to establish roots in the Chinese market.'

The resumption of H20 sales marks a shift in US-China technology relations after the chips were effectively banned in April with an onerous export license requirement, forcing Nvidia to take a $4.5 billion write-off for excess inventory and purchase obligations. According to Reuters, Chinese sales generated $17 billion in revenue for Nvidia in the fiscal year ending January 26, representing 13 percent of total sales. Nvidia also announced it will introduce a new 'RTX Pro' chip model specifically tailored to meet regulatory rules in the Chinese market, though the company provided no details about its specifications or capabilities.

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