NVIDIA’s Struggle to Sell H20 AI GPUs to China Persists Despite Trump Administration Approval, Revealing Ongoing Deadlock

NVIDIA recently disclosed that despite the lifting of export controls by the Trump administration, the highly anticipated H20 AI chips have yet to reach the Chinese market. Surprisingly, it is not the U. S.government hindering sales; rather, the obstacle appears to be coming from China itself.

NVIDIA’s H20 AI Chips: A Casualty of Geopolitical Tensions

In its latest earnings report for the second quarter, NVIDIA—affectionately referred to as Team Green—revealed a notable absence of sales activity in China, a market they had hoped to penetrate after receiving a green light for the export of AI technology. This optimism shifted into skepticism when concerns from Chinese authorities surfaced, alleging that NVIDIA’s chips may harbor security vulnerabilities.

According to the recent earnings announcement, NVIDIA confirmed that there were ‘no H20 sales’ to customers based in China during the second quarter. The only revenue recorded came from previously placed orders that had already been fulfilled. The entitlement of a so-called ‘mysterious’ client who purchased $650 million worth of H20 chips is notable; this figure was derived from an inventory set aside in advance and excluded from Q2 forecasts. Consequently, NVIDIA finds itself at a standstill, as customers are hesitant to embrace their technology amidst these unfolding tensions.

NVIDIA's H20 AI Accelerators Might Face The Next

The Chinese government has initiated an investigation into potential security backdoors in the H20 AI chips. This move can be traced back to policies implemented during the Trump administration, which pushed for enhanced security protocols in AI technology. In light of these developments, Chinese tech companies are being encouraged to pivot towards homegrown alternatives, developed by domestic entities such as Cambricon, rather than relying on NVIDIA’s offerings. However, the transition to a fully domestic tech stack is a complex process that cannot be executed swiftly.

NVIDIA’s projections suggest that if sales of the H20 AI chips could commence in China, the company could generate between $2 billion and $5 billion in revenue from this market segment alone. More critically, NVIDIA aims to introduce an advanced ‘Blackwell-based’ solution, thereby positioning its technology as indispensable for Chinese firms. NVIDIA CEO Jensen Huang has even indicated a willingness to share some of the company’s revenue with the U. S.government to facilitate such a deal.

No H20 has been shipped. H20 will not be included in Q3 outlook. If license approved, 2-5 billion of H20 can be expected. Continue to ask for Blackwell sales in China for approval from the USG.

— Ray Wang (@rwang07) August 27, 2025

Securing access to China is a critical priority for NVIDIA at this juncture, as the company stands to lose out on substantial revenue—potentially in the tens of billions. Moreover, as domestic competitors like Huawei make strides in AI development, the threat to U. S.dominance in the AI technology landscape becomes increasingly pronounced.

Source & Images