Nvidia is back in China — and the stock pops

Nvidia $NVDA said in a company blog post on Monday that it has received assurances from the Trump administration that Commerce Department licenses for the company’s H20 AI chip will be granted, allowing the $4 trillion powerhouse to restart deliveries to China. The announcement comes just days after Huang reportedly made the case directly to President Donald Trump and Commerce Secretary Howard Lutnick.

The timing for Nvidia couldn’t be better. Huang is in Beijing this week to meet with senior Chinese officials and speak at a media event, bringing with him both fresh approval from Washington and a new, stripped-down chip tailored for China’s tightly controlled import rules. This is Nvidia’s clearest path yet to salvaging its business in one of its most critical markets.

The H20 was supposed to be Nvidia’s big workaround for restrictions on sales of powerful AI hardware to China. When the U.S. tightened export rules last year, Nvidia responded by launching the chip, a lower-spec version of its flagship GPU designed to fall just under those limits. But in April, the Commerce Department blocked the H20 anyway, leaving Nvidia with billions in stranded inventory and Chinese customers in limbo. 

Now, the U.S. has reversed course — at least partially. Nvidia says it hopes to begin H20 shipments to China “soon.”

Investors cheers the news. Nvidia stock was up about 5% in Tuesday morning trading. Other chipmakers with China exposure also gained, as AMD $AMD stock rose 7% and Broadcom $AVGO added almost 3%.

For Nvidia, the decision cracks open a market that had largely gone dark. Chinese companies, including ByteDance, Alibaba Group, and Tencent Holdings, had reportedly ordered as much as $16 billion worth of H20 chips before the ban. Nvidia ended up writing off roughly $5 billion in inventory; Huang said the restrictions cost the company $15 billion. With the H20 suddenly back on the table, a sizable chunk of that business could be revived.

Alongside the H20, Nvidia is also introducing a “China-compliant” chip: the RTX Pro, a lower-performance model designed for industrial and logistics applications that Huang said “is ideal for digital twin AI for smart factories and logistics.” The new chip meets U.S. export rules and was cleared without controversy. The RTX Pro should give Nvidia a legal and diplomatic safety valve, keeping one foot in the Chinese market even if future restrictions tighten (again).

“This is a monster win for the Godfather of AI Jensen [Huang] and Nvidia,” Wedbush analyst Dan Ives wrote in a Tuesday note. “Its also a major bullish tailwind for the tech sector as the green light for Nvidia will propel Street estimates to go up meaningfully over the coming years with China back in the fold.”

Huang has been making the case for walked-back export restrictions. In a recent interview with CNN’s Fareed Zakaria, the Nvidia CEO warned that aggressive export restrictions would only accelerate China’s development of domestic alternatives, ultimately undermining U.S. leadership in AI. “Depriving someone of technology is not a goal, it’s a tactic,” Huang said. “And that tactic was not in service of the goal.” He added: “Our mission properly expressed, in order for America to have AI leadership, is to make sure that the American tech stack is available to markets all over the world so that amazing developers, including the ones in China, are able to build on American tech stack so that A.I. runs best on the American tech stack.”

That argument appears to have landed.

In the meeting with Trump, Huang emphasized that U.S. dominance in AI depends on letting American companies compete everywhere, not just at home. “General-purpose, open-source research and foundation models are the backbone of AI innovation,” Huang told reporters in D.C. “We believe that every civil model should run best on the U.S. technology stack, encouraging nations worldwide to choose America.”  

Nvidia’s presence in China has long been a balancing act. At its peak, the company commanded more than 90% of China’s data center GPU market. But after multiple rounds of export controls, that share has dropped to around 50%. Domestic rivals such as Huawei and Biren have gained ground; Chinese tech giants such as Baidu and Alibaba are testing alternative platforms (including Huawei’s Ascend chips); and smaller players such as Moore Threads, Enflame, and Iluvatar CoreX are rapidly growing, with IPOs planned — totaling almost $1.7 billion and aimed at capitalizing on the West’s retreat.

Still, Nvidia’s technology remains hard to replace. The vast majority of China’s most advanced AI data centers — including close to 40 recently announced projects that will be loaded with more than 115,000 high-end Nvidia GPUs — still rely on Nvidia chips, often stockpiled through intermediaries or legacy contracts. Chinese firms may be building, but they’re still playing catch-up.

Politically, giving the H20 the green light is a calculated move. Beijing has made semiconductors a centerpiece issue in trade talks, and China has pushed for unfettered access to AI chips in summits. Meanwhile, China’s at-home chip play continues full throttle. Whether the White House is making a one-off concession or signaling the start of a broader policy shift remains to be seen. The Trump administration has kept a tight grip on high-tech exports and has said only a small number of licenses will be granted. But this move — timed to Huang’s Beijing trip and aligned with Chinese trade talks — reads like a carefully calibrated exception.

Huang arrived in Beijing with a message that seems to resonate in both capitals: Nvidia wants to win globally, and the U.S. can’t lead in AI if its top companies are sidelined. For now, that message appears to be working. The chips are moving. The licenses are coming. The move to allow Nvidia into China gives the company breathing room — and reopens a vital revenue stream in one of the world’s most AI-hungry markets. And for Huang, who has become the face of the global AI boom, it’s a reminder that silicon strategy now moves at the speed of diplomacy.