Nvidia (NASDAQ:NVDA) shares rose 4.3% during early Tuesday trading after the company disclosed in a blog post that it will soon resume shipping its H20 artificial intelligence chips to China.
Nvidia CEO Jensen Huang had stated earlier that the export ban cost the company over $7.4 billion ($10 billion) in revenue. The development comes days after Huang met US President Trump and policymakers in the Oval Office to reaffirm Nvidia's support for the Administration's plans to create jobs, bolster domestic AI infrastructure and onshore manufacturing to help the country lead the AI race. The CEO also had meetings with Chinese government and industry officials this week.
Huang also stated that Nvidia is already filing applications to sell the H20 graphics processing units to China, with deliveries expected to start soon. The US government assured the AI chipmaker that licenses will be granted and sales will be approved. Overall, the reversal of the export ban is likely to be a major boost to Nvidia's bottom line, further driving the market capitalisation of the company, which recently surpassed a £2.9 trillion ($4 trillion) valuation.
The reversal of the ban, enforced by Trump in April, is definitely a win for Nvidia and Huang, but there has been no confirmation that the restrictions are fully gone. The question is how soon licenses are approved and when revenue benefits show up in the company's balance sheet.
Nvidia had almost £5.9 billion ($8 billion) in unshipped H20 chip June-quarter orders. These chips are designed and intended solely for the China market. Huang and top tech leaders had been lobbying for easing restrictions on chip controls, arguing that these limits would blunt America's competitive edge in the rapidly growing AI sector, with risks of losing ground in one of the world's leading tech markets.
Huang is set to appear at the opening ceremony of the China International Supply Chain Expo tomorrow, which marks his third visit to the mainland in 2025. Nvidia is committed to the market despite rising competition from domestic firms like Huawei.
'Nvidia resuming H20 chip sales in China is a gamechanger in our view. Trump knows there is one chip in the world fueling the AI Revolution and it's Nvidia. Giving green light to Jensen/Nvidia all part of negotiations with China. Nvidia gets $30 billion+ annual biz back,' wrote Wedbush analyst Dan Ives in a post on X, formerly Twitter.
Wedbush analysts noted that this is a 'watershed moment' for Nvidia, the AI Revolution thesis, and the US tech sector. 'There is one chip fueling the AI Revolution.. It's the Godfather of AI, Jensen and Nvidia. That is not even a debate in DC and Beijing,' Ives wrote in a separate X post.
The Wedbush team added that it is a game of high-stakes poker between Nvidia and Trump. Jensen is a major supporter of job creation and onshoring efforts and is leading the AI revolution globally. They concluded that Nvidia isn't going to hand Huawei its business 'on a silver platter' and Jensen is aware the US should allow selling H20 chips again to prevent China from gaining an advantage in the 'AI Arms Race.'
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