The administration of U.S. President Donald Trump has approved the sale of Nvidia’s (NVDA) H200 microchip to 10 Chinese firms in a sign of a breakthrough for the technology company.
Nvidia CEO Jensen Huang is accompanying Trump on his visit to China. Until now, sales to China of Nvidia’s microchips had been banned by the U.S. government over national security concerns.
There had been widespread hopes among investors and analysts that the China trip could finally unlock stalled efforts to sell Nvidia’s H200 microchip in China.
The H200 microchip is a high-performance data centre processor designed to accelerate artificial intelligence (A.I.) training, inference, and high-performance computing (HPC).
While it is not Nvidia’s most powerful microchip, the H200 had been in high demand among Chinese technology companies seeking to advance their A.I. products.
Before U.S. export curbs came into force, Nvidia commanded about 95% of China’s advanced microchip market.
Sales of processors in China used to account for 13% of Nvidia’s annual revenue. Today, that figure is near zero.
Huang said on a recent earnings call that China’s artificial intelligence (A.I.) market would be worth $50 billion U.S. to Nvidia if it can succeed in selling its H200 chip in the Asian nation.
Now, a limited number of Chinese companies are permitted to purchase the H200 chip directly from Nvidia or through ?intermediaries.
Each Chinese firm is approved to purchase up to 75,000 of the Nvidia microchip under ?a new U.S. licensing agreement, according to the White House.
The identities of the approved buyers, and the nature of their relationships with Nvidia, have not been made public.
Despite the U.S. approval, Nvidia will still needs the blessing of Chinese officials in Beijing. Many Chinese firms pulled back on Nvidia chip purchases after guidance from China’s government.
NVDA stock has risen 67% in the last 12 months to trade at $225.83 U.S. per share.
