This is not investment advice. The author has no position in any of the stocks mentioned. Wccftech.com has a disclosure and ethics policy.
Chip designer NVIDIA Corporation's GPUs are in high demand in China after the firm announced earlier that it had started to accept orders for the chips and believes the Trump administration will grant the firm export licenses. NVIDIA's announcement came as CEO Jensen Huang visits Beijing after being constrained earlier this year to sell products to China after restrictions on NVIDIA's H20 chips.
NVIDIA Shares Up 3.4% After Firm Confident About Resuming Sales To China
NVIDIA and smaller rival and peer AMD's shares are up at market open today as the firms confirmed that they should soon be able to start selling AI chips to China. NVIDIA's stock opened 4.4% higher after the firm shared in an earlier blog post that it was accepting orders for the China-specific H20 AI GPU. NVIDIA added that it was confident that the Trump administration would grant the firm licenses to export the AI chips.
While the firm's statement did not imply that the US had waived export license requirements for the H20 AI GPUs, it did nevertheless indicate that it could start shipping the chips to Chinese entities. Multiple reports have suggested that big Chinese technology firms continue to rely on NVIDIA's products due to their performance and software advantages. This reliance has also spurred Huawei to develop better AI chips to compete effectively with NVIDIA's products.
NVIDIA's announcement was accompanied by the Malaysian government announcing its own set of export rules for advanced AI chips. These rules will require firms seeking to ship the chips outside Malaysia to inform the government at least 30 days before the shipments.
Now, sources quoted by Reuters report that Chinese firms are rushing to place AI GPU orders with NVIDIA as the firm starts to accept them. The decision to place the orders reflects both the shortage of the chips in China and attempts to stock them should the US government decide to tighten the licensing process again in the future.
Once the Chinese firms have placed the orders, NVIDIA will forward the details to the US government for approval. Reuters' sources add that ByteDance and Tencent are also submitting applications for the AI chips. Whether these applications will be approved is unclear, and the Trump administration might decide to use them as leverage in its negotiations with China.
NVIDIA's optimism on Chinese sales is the result of a long-drawn campaign by CEO Jensen Huang to convince US officials that sanctions against China could prove to be counterproductive and stimulate the country's domestic AI industry. Huang believes that if Chinese firms rely on Huawei or other non-US AI chips, then America will lose the ability to dominate the global AI stack. However, sanctions hawks have warned that providing China with the latest AI chips can lead to their military use to potentially act against US national security interests.
About the author: Ramish is a seasoned technology writer and editor with more than a decade of experience. He specializes in semiconductor fabrication and market analysis. With a background in finance and supply chain management - via his bachelors in Finance and a micromasters in supply chain management from MIT - Ramish combines financial rigor with deep industry insight to deliver accurate and authoritative coverage.
Follow Wccftech on Google to get more of our news coverage in your feeds.
