On July 15, the U.S. Commerce Department approved Nvidia’s application to resume sales of its H20 AI chips to China, easing restrictions imposed in April under national security concerns. The decision comes after meetings between Nvidia CEO Jensen Huang and U.S. officials, including President Trump and Commerce Secretary Howard Lutnick, who described the H20 as Nvidia’s “fourth best” chip and indicated that permitting its export would maintain China’s reliance on U.S. technology while safeguarding America’s access to more advanced chips.
Nvidia shares surged over 5%, reaching an intraday high of $172.39, reinforcing momentum in the tech-heavy Nasdaq futures market. The rally extended to other semiconductor players such as TSMC and AMD, buoyed by broader sentiment that the shift allows U.S. chipmakers to regain lost ground in China without compromising national security.
Administration officials emphasized that the H20 chip, while technically capable, is deliberately positioned below top-tier models like the H100 and newly introduced Blackwell chips. This permits exports without tipping the balance of technological superiority. Secretary Lutnick said the U.S. preferred limiting exports to this “fourth best” chip to keep China tethered to American innovation.
The decision to approve sales reflects a calibrated approach: reaffirming U.S. technological leadership while acknowledging China’s significance as a major consumer of AI hardware. Nvidia’s revenue from China totaled approximately $17 billion in fiscal 2024—around 13% of its total sales—resulting in a $5.5 billion write-down when April’s ban forced the company to pause shipments.
CEO Huang, who met with President Trump in Washington and made a subsequent trip to Beijing, downplayed his personal influence on the decision. Nevertheless, Nvidia stated that talks with both governments helped “inform” U.S. authorities of the economic impact. Deliveries of the chip are expected to begin “soon,” according to company officials.
The stock market response was swift. Nvidia shares climbed more than 5%, briefly hitting record highs in the $172 range. Broader tech and chip-sector stocks, including TSMC and AMD, benefitted from regained confidence in access to the Chinese market.
Analysts called this move a watershed for both Nvidia and the broader AI industry. Wedbush Securities labeled it pivotal, while Melius Research forecasted that restoring roughly $8 billion in annual China H20 sales could drive Nvidia’s fiscal 2027 revenue growth to nearly 38%.
Strategically, the approval signals a nuanced U.S. policy stance: limiting China’s access to cutting-edge tech while sustaining commercial ties. Lutnick emphasized this balance, underscoring the goal of tethering China’s capabilities to American supply chains.
Observers view the downgrade–license process as part of a broader U.S. trade strategy, preserving export revenue without enabling military-grade AI applications. The revamped H20—likely with reduced memory and other performance constraints—illustrates this balancing act between regulatory compliance and market access.
Meanwhile, Bitcoin experienced a modest pullback following a recent rally to record highs. Investors paused trading to reassess macroeconomic cues from inflation data and bank earnings. Similar behavior has been noted in earlier cycles—investors momentarily backing off around major economic reports, even amid strong institutional inflows.
This pause highlights a broader market theme: even as AI and chip optimism drives equities, cryptocurrencies reflect cautious sentiment among risk-on investors seeking clarity on monetary policy and corporate health before committing further.
