NVIDIA, AMD to Resume AI Chip Sales to China Following US-China Trade Deal

NVIDIA and Advanced Micro Devices (AMD) are set to resume sales of their H20 and MI308 AI chips, respectively, to China, following assurances from the US government regarding export license approvals. This significant policy reversal, which comes after NVIDIA CEO Jensen Huang met with President Trump, is part of a broader US-China trade agreement. The deal includes tariff reductions, increased Chinese rare earth shipments to the US, and the lifting of US export curbs on microchip designing software, ethane, and jet engines, marking a notable shift in US technology export policy towards China.

Analysis

NVIDIA and Advanced Micro Devices are set to resume AI chip sales to China following a significant reversal in U.S. trade policy. NVIDIA will restart sales of its H20 AI chip, a move announced after CEO Jensen Huang met with President Trump, while AMD will resume selling its MI308 AI chips. This policy shift is underpinned by assurances from the U.S. government that export license applications will be approved. The development is a component of a broader trade agreement between the U.S. and China, which also includes reduced tariffs, increased Chinese rare earth shipments to the U.S., and lifted American export curbs on microchip design software, ethane, and jet engines. For NVIDIA, this directly addresses a key concern previously voiced by its CEO regarding billions of dollars in lost revenue from restrictions, suggesting a potential recapture of a significant market.

Key Decisions for Investors

• Investors should re-evaluate revenue forecasts for NVIDIA and AMD, as the reopening of the Chinese market for their specific AI chips could unlock a previously restricted, multi-billion dollar revenue stream.
• The broader trade agreement signals a de-escalation in U.S.-China trade tensions, potentially reducing geopolitical risk premiums for the U.S. semiconductor sector and related industries with significant China exposure.
• Monitor for official White House confirmation and the actual commencement of shipments, as the execution of this policy shift is critical and any political friction could impact the otherwise positive outlook for these companies.