A major barrier to the AI bellwether’s access to a crucial market has been removed, as the Commerce Department has begun issuing licenses to Nvidia to export its H20 chips to China, a U.S. official told reporters on Friday.
Last month, the U.S. overturned an April ban on the sale of the H20 chip to China, as the company had customized the microprocessor specifically for the Chinese market to comply with the Biden-era AI chip export controls.
The chipmaker has warned that the limits will reduce sales from its July quarter by $8 billion.
Two people with knowledge of the situation told Reuters that Nvidia CEO Jensen Huang met with Trump on Wednesday.
The business stated in July that it was submitting applications to the U.S. government to resume selling the H20 graphics processing unit to China and that it had received assurances that the licenses will be granted to it shortly.
The number of licenses that may have been granted, the companies to which Nvidia is permitted to export the H20s, and the maximum value of shipments permitted are all unknown.
In April, Nvidia revealed that it anticipated paying $5.5 billion for the limitations.
Because it was able to reuse some materials, Nvidia reported in May that the actual first-quarter charge resulting from the H20 limits was $1 billion less than anticipated.
Following China’s concerns about possible security flaws in the H20 chip, Nvidia declared last month that none of its products include “backdoors” that would provide remote access or control.
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With the exception of the H20, Nvidia’s other cutting-edge AI processors are still not allowed to be exported to China.
To impede Beijing’s advancements in artificial intelligence and the military, the United States has reduced its exports of sophisticated processors to China during several administrations.
Although this has made it more difficult for American companies to meet the rapidly increasing demand from China, one of the biggest semiconductor markets in the world, it is still a significant source of income for American chipmakers.
Without sales to China, where Huawei Technologies was courting developers with chips made in China, Huang warned that the company’s dominant position may erode.
Nvidia reported in May that the H20 had generated $4.6 billion in sales in the first quarter, with China contributing 12.5% of total revenue during that time.
