Chinese firms accelerate GPU orders ahead of expected US export restrictions lifting, creating massive demand surge.

Chinese firms have begun rushing to order Nvidia's H20 AI chips as the company plans to resume sales to mainland China following a meeting between CEO Jensen Huang and President Donald Trump. Nvidia said in a statement that it is filing applications with the US government to resume H20 sales and that "the US government has assured Nvidia that licenses will be granted, and Nvidia hopes to start deliveries soon." The chip giant expects to receive US government licenses soon, potentially generating $15 billion to $20 billion in additional revenue this year.

The H20 chips represent Nvidia's most capable AI processors legally available in China, though they contain less computing power than versions sold elsewhere due to export restrictions imposed in 2022. Chinese tech giants, including ByteDance and Tencent, are reportedly scrambling to place orders for the chip through what sources describe as an approved list managed by Nvidia. Since the launch of ChatGPT in 2022, Nvidia's financial trajectory has been linked to the demand for specialized hardware capable of executing AI models with maximum efficiency, with the company designing its data center GPUs to perform the massive parallel computations required by neural networks.

The resumption of H20 sales marks a significant shift in US-China technology relations after the chips were effectively banned in April with an onerous export license requirement. This previous ban forced Nvidia to take a $4.5 billion write-off for excess inventory and purchase obligations. According to Reuters, Chinese sales generated $17 billion in revenue for Nvidia in the fiscal year ending January 26, representing 13 percent of total sales, underscoring the importance of the Chinese market to the chipmaker.

During his visit to Beijing, where he is scheduled to speak at a supply chain expo, Huang told Chinese state broadcaster CCTV: "The Chinese market is massive, dynamic, and highly innovative, and it's also home to many AI researchers. Therefore, it is indeed crucial for American companies to establish roots in the Chinese market." In addition to resuming H20 sales, Nvidia announced it will introduce a new "RTX Pro" chip model specifically tailored to meet regulatory rules in the Chinese market, though the company provided no details about its specifications or capabilities.