Nvidia to resume H20 chip sales in China as CEO Jensen Huang visits Beijing

Nvidia, which recently hit a US$4 trillion market capitalization, announced on Tuesday that it will resume sales of its H20 chips to China. This development coincides with CEO Jensen Huang's visit to Beijing, where he is promoting artificial intelligence development.

The resumption of sales marks a shift in the landscape of US-China tech relations, which has seen AI chip export controls at the heart of trade disputes, experts said.

The H20, a specialized GPU (graphics processing unit) tailored for the Chinese market with limitations on advanced AI features, had previously faced a sales prohibition to China. This ban, stemming from escalating US export controls aimed at restricting China's access to cutting-edge AI technology, resulted in multi-billion dollar losses for Nvidia due to unsold inventory and missed revenue opportunities.

Huang noted that Nvidia is filing applications to sell the Nvidia H20 GPU again. The United States government has assured Nvidia that licenses will be granted, and it hopes to "start deliveries soon." During his time in Beijing, Huang engaged with government and industry leaders, emphasizing AI's potential to boost productivity and create new opportunities.

Following Tuesday's announcement, shares of Co-Packaged Optics (CPO) firms, key suppliers in the Nvidia H20 supply chain, saw a surge in morning trading. Eoptolink jumped 20 percent to its daily cap of 157.08 yuan (US$21.81), reaching a new record high, while Zhongji Innolight surged 11.7 percent to close at 167.37 yuan.

Meanwhile, Nvidia also unveiled a new GPU, the RTX Pro, designed to be "fully compliant" with export regulations and deemed "ideal for digital twin AI for smart factories and logistics." This strategic move underscores Nvidia's commitment to navigating the complex regulatory environment while continuing to serve the burgeoning AI market in China.

Huang's schedule in Beijing also includes a meeting with a small group of media outlets on Wednesday. He might also attend the China International Supply Chain Expo, which opens on Wednesday and where Nvidia has a presence with a booth.

The national-level supply chain expo, held for the first time, aims to connect upstream, midstream and downstream sectors and foster interaction between Chinese and international businesses.