Nvidia said Tuesday that it would ensure the US government can resume selling H20 AI chips to China, signaling further emissions between the US and China. However, two important questions remain unanswered.
During a visit to China, Nvidia CEO Jensen Huang said the company has submitted an application to resume sales of its H20 GPUs. The US government has indicated that the license will be granted, and Nvidia hopes to start delivering it soon. Meanwhile, Huang has announced a new, fully compliant Nvidia RTX Pro GPU, which he describes as “optimal for digital twin AI in smart factories and logistics.”
On April 9, 2025, the US government informed NVIDIA that it exports H20 chips or chips with comparable memory bandwidth (requires a license with China or a company headquartered there or the ultimate parent in China.” The licensing requirements are indefinitely valid. As a result, Nvidia previously estimated a fee of around $5.5 billion related to H20 inventory, but the final writes are around $4.5 billion.
After President Trump went into H20-related export controls in April, Nvidia designed the new China-centric product, the RTX Pro. The company described it as “completely compliant.” This means that it falls below the technical thresholds outlined by US regulators. It uses traditional GDDR7 memory instead of HBM and avoids advanced Cowos packages, half the price of the H20 will be a much cheaper product. Generally speaking, this latest chip is a heavily downgraded version of the H20, which is already inferior to the H100, the legacy AI chip of Nvidia three years ago.
The H20 license approval may arrive soon, but two major concerns remain. First, there may be potential allocations for H20 chip exports. As the licensing requirements are indefinitely, this suggests more stringent surveillance of where the chip is heading. US officials are expected to scrutinise shipments to ensure that H20 chips do not fall into military applications. Jensen Huang says policymakers should not use Nvidia chips to worry about the Chinese military, but he asserts that China cannot rely on products the US can block at any time, but the H20 still has strategic value. It can also be used as a negotiation chip to limit the development of AI in China.
Second, even if the H20 license is approved, NVIDIA is expected to continue promoting China's RTX Pro. The RTX Pro does not require an export license, but its inferior performance limits its competitiveness. Huang acknowledges that Nvidia's market share in Asia has dropped from 95% to 50%, with Huawei being the main beneficiary. The slow rollout of high-end chips like the H20 does not stop China from accelerating the development of its own domestic AI chips.
China generated NVIDIA revenue of $17 billion for the fiscal year ending January 26, accounting for 13% of the company's total revenue. But as geopolitical tensions and ideological rifts between the US and China continue, Nvidia will continue to face headwinds in the world's second-largest economy despite its $4 trillion market capitalization.
