How Nvidia’s diplomacy paid off in the US-China tech war

Nvidia CEO Jensen Huang speaks to journalists as he arrives for a press conference at a hotel in Beijing on July 16, 2025.

Nvidia has received permission from the Trump administration to resume sales of its H20 artificial intelligence chip in China, reversing earlier restrictions and signalling a shift in US trade strategy. The decision comes just days after Nvidia CEO Jensen Huang met US President Donald Trump and top Commerce Department officials to advocate for access to the Chinese market, the Wall Street Journal reported.

The green light marks a significant win for the California-based chipmaker, which had seen its China revenues shrink after the Commerce Department imposed new export controls in April. Those restrictions had halted sales of Nvidia’s best-selling AI chip in China, costing the company billions in potential revenue.

Huang, who is currently in Beijing, confirmed to reporters: “I’m very happy,” following the announcement.

A vital market opens up again

China is Nvidia’s second-largest market, and the H20 chip—designed specifically to comply with earlier US restrictions—had become a top seller in the country since 2024. While Nvidia is still barred from selling its most powerful chips, the Commerce Department will now issue licenses to resume H20 shipments, the company said. Deliveries are expected to begin soon.

In addition to the H20, Huang revealed that Nvidia has developed a new chip based on its cutting-edge Blackwell architecture but with performance downgrades to address US national security concerns. The chip, aimed at factory automation and logistics use cases, underscores Nvidia’s ongoing effort to balance innovation with regulatory compliance.

Seen as a gesture in trade negotiations

The reversal is being interpreted in Beijing as a positive gesture amid fragile US-China trade talks. Last month, the two countries agreed to a limited truce, with China promising to accelerate rare-earth mineral approvals needed by US tech companies. This week, Chinese regulators also conditionally cleared Synopsys’ $35 billion acquisition, which had been delayed since 2024.

Few US companies are as entangled in the tech war as Nvidia. Its chips are essential to global AI development, making Huang a key figure in geopolitics. In recent months, he has made multiple trips between Washington and Beijing to make the case that American leadership in AI depends on selling globally, including in China.

Still under scrutiny in Washington

Despite the breakthrough, tensions remain. Senators Jim Banks and Elizabeth Warren recently asked Huang to avoid meetings with Chinese entities tied to military or intelligence operations. Critics worry Nvidia’s tech could indirectly benefit China’s national security apparatus.

Nvidia, meanwhile, continues to navigate a rapidly shifting regulatory landscape. Huang has publicly criticized the unpredictability of US export policies, calling them a “failure” in May. The Commerce Department has already drafted backup plans for tougher restrictions, should trade relations deteriorate again.

Nvidia’s stock surges, AMD also benefits

Shares of Nvidia jumped more than 4% following the news. Rival chipmaker AMD also gained over 5% in early trading after revealing that it expects to resume exports of its MI308 chips to China, pending license approval.

Separately, Nvidia is awaiting final approval for a multi-year chip supply deal with the United Arab Emirates. The $3 billion deal, announced in May, has faced delays amid fears that the chips could be rerouted to China via UAE partnerships.

For now, Nvidia has secured a crucial win in its battle to maintain global AI dominance while navigating the complex and often contradictory demands of US foreign policy.