Trump Lifts Tech Restrictions, Allows Nvidia H20 AI Chip Sales to China

Washington: In a surprising policy shift, former U.S. President Donald Trump has eased long-standing technology restrictions on China by allowing Nvidia to resume sales of its H20 artificial intelligence (AI) chip for the Chinese market. The move reverses a prior export control that had been in place since April, citing national security concerns.

Despite calls from Beijing to relax the export curbs, Chinese authorities responded cautiously. Chinese regulators summoned Nvidia over potential security risks and advised domestic companies against using the H20 chip, highlighting China’s push to build a self-reliant semiconductor supply chain.

The decision underscores the growing strength of China’s chip industry, which has made significant advancements in recent years, although the country remains dependent on U.S. technology for cutting-edge AI processors. Huawei has already developed chips with performance comparable to or exceeding Nvidia’s H20, but the more advanced processors remain restricted under U.S. export controls.

Trump initially imposed the ban in April but reversed it last month, arguing that the H20 chip is “obsolete” compared with Nvidia’s latest processors, such as the Blackwell and H100, and poses no threat to U.S. technological dominance. Nvidia CEO Jensen Huang has long advocated maintaining U.S. chips as the global standard, a strategy aligned with Trump’s decision.

U.S. Commerce Secretary Howard Lutnick also supported wider access, suggesting that allowing Chinese developers sufficient chips could increase their reliance on American technology. However, the policy shift has sparked debate over whether national security considerations are being subordinated to political calculations.

Beijing has expressed concerns that the H20 chip could include features like tracking, positioning, or remote shutdown capabilities, which may pose security risks. Nvidia has denied all such allegations, asserting that none of its chips contain backdoors. Chinese cybersecurity and industrial authorities have called on Nvidia for explanations and cautioned major domestic companies against purchasing or using the H20.

Despite the criticism, the H20 chip remains highly sought after by Chinese tech giants such as ByteDance, Alibaba, and Tencent. Market analysts estimate that without restrictions, roughly 1.5 million H20 chips, valued at $23 billion, could have been shipped to China this year.

Although Huawei’s AI chips are powerful, they still lag in memory bandwidth compared with global leaders such as SK Hynix, Samsung, and Micron. China’s domestic high-bandwidth memory (HBM) production is still three to four years behind. Limited production capacity also constrains Huawei, with only about 700,000 units of advanced AI chips expected in 2025—far below demand.

U.S. export controls have accelerated China’s domestic chip development. Bernstein forecasts that locally produced AI chips in China will rise from 17% in 2023 to 55% by 2027, while U.S. companies’ share, including Nvidia and AMD, will fall from 83% to 45%. Huang acknowledged China’s rapid progress, saying, “Huawei has made extraordinary strides in recent years. They are right behind us—we are very close.”

While the U.S. decision to allow H20 sales temporarily eases strategic pressure, Beijing remains cautious, framing the chip as a potential security risk. China’s ultimate goal remains building a fully self-reliant semiconductor supply chain, though U.S. technology continues to be indispensable in the near term.