Nvidia stock soars 5% as $4 trillion chipmaker secures US approval to resume H20 sales after strategic meetings with Trump and Chinese officials
In a diplomatic masterstroke that sent shockwaves through Wall Street, Nvidia CEO Jensen Huang has successfully secured approval to resume AI chip sales to China, ending a costly three-month export ban that threatened to derail the company’s access to what Huang calls a $50 billion market opportunity.
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The Game-Changing Announcement
Nvidia announced Tuesday that the US government has assured the company that licenses will be granted to resume H20 AI chip sales to China, with deliveries expected to start “soon.” The news sent Nvidia stock soaring over 5% in pre-market trading, helping push the Nasdaq to another record high.
Impact of the China Export Ban
| Financial Impact | Details |
|---|---|
| Q1 2025 Lost Revenue | $2.5 billion |
| Q2 2025 Expected Loss | $8 billion |
| China Market Potential | $50 billion (2-3 years) |
| Stock Reaction | +5% pre-market |
| Market Cap | $4 trillion (first company to reach) |
| China’s 2024 Revenue | $17 billion (13% of total) |
Huang’s Strategic Diplomacy
The breakthrough came after Huang met with President Trump at the White House last week, followed by high-level meetings with Chinese government and industry officials in Beijing. During his Beijing visit, Huang praised China’s AI innovation, calling models like DeepSeek, Alibaba, and Baidu “world class.”
Key Huang Quotes:
- “More than 1.5 million developers in China build on Nvidia today to bring their innovations to life”
- “China’s open-source AI is a catalyst for global progress”
- “We’re doing our best to serve China’s vast market for semiconductors”
Why This Matters for Global AI
China-developed DeepSeek shocked global investors in January with an AI model that undercut OpenAI on development and operating costs. The resumption of H20 sales gives Chinese companies continued access to advanced (though not cutting-edge) AI processing power while they develop indigenous alternatives.
Strategic Implications:
- Nvidia regains access to world’s second-largest economy
- Chinese AI development continues with US technology
- Competitive pressure on rivals like Huawei
- Global AI leadership maintained through American tech stack
The H20 Chip Strategy
The H20 represents a carefully calibrated compromise – powerful enough to serve China’s AI ambitions but restricted enough to satisfy US national security concerns. Huang expressed hope to eventually sell “more advanced chips to China than the H20” as technology and geopolitics evolve.
Market Response and Industry Impact
Daniel Ives of Wedbush Securities called this “a watershed moment for Nvidia, the AI Revolution thesis, and the overall US tech industry,” describing it as “a monster win for the Godfather of AI Jensen and Nvidia.”
AMD Also Benefits: Fellow chipmaker AMD announced it too plans to restart AI chip sales to China, with license applications for its MI308 products moving forward for review.
Looking Ahead
With export licenses expected to resume, Nvidia anticipates significant revenue boosts in the second half of 2025. The company’s 97% market share in GPU accelerators positions it perfectly to capitalize on China’s massive AI infrastructure buildout.
For investors tracking the AI chip market and US-China trade relations, this development signals a potential thaw in tech tensions and validates Nvidia’s patient diplomatic approach.
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