(Bloomberg) -- Nvidia Corp.’s Jensen Huang spent months telling everyone what a grave mistake the US was making restricting shipments of artificial intelligence processors to China — with little sign that his argument was swaying anyone.
Then, very suddenly, that all changed.
Late on Monday, the chipmaker said it received assurances that the US government would allow it to export some chips to the Asian nation. Advanced Micro Devices Inc., Nvidia’s chief rival, quickly followed with a similar announcement. These export license approvals could generate billions of dollars in total revenue for the companies this year — and they mark a dramatic reversal after the Trump administration said the issue wasn’t even up for debate.
Huang has taken almost every opportunity available to him — from the stage of tech events to Washington visits — to argue that a crackdown on China is counterproductive. During his appearances, he navigated a fine line between praising Trump policies aimed at bringing back chip manufacturing to the US and demanding more freedom to do business in China.
Just last week, Huang met with President Donald Trump at the White House.
“Jensen has done a wonderful job at advocating to the administration,” said Matthew Bryson, an analyst at Wedbush Securities. The CEO has catered to the White House’s interest in investing in the US, “while at the same time advocating his views on the importance that US AI should flow freely,” he said.
When Nvidia announced its plans to reenter the China market, Huang was visiting Beijing, attending a government-sponsored event and meeting officials to discuss “safe and secure AI for the benefit of all,” according to a company statement. Nvidia said it was assured that licenses would be granted by the US government and “hopes to start deliveries soon.”
“It is a positive signal not only for Nvidia and its related supply chain but also for broader markets given its implications for US-China trade talks,” said Richard Clode, portfolio manager at Janus Henderson Investors.
Still, there’s no guarantee the new approvals will lead to flourishing business in China. Nvidia and AMD aren’t certain how many chips the new export licenses will cover or how long they will last, according to a person familiar with the matter. In China, the US chipmakers are only permitted to sell older, limited versions of their products. And many buyers in the country, where companies are rapidly churning out AI models, have moved to local suppliers.
Washington officials have assured Huang they will move rapidly on granting the first batch of licenses. Nvidia’s order pipeline was solid, he added.
“We have to wait until the licenses come through,” Huang said at a high-profile Chinese government-backed conference in Beijing on Wednesday. “I’ve been assured that the licenses will move very fast.”
It’s also not clear how much Huang’s lobbying turned the tide. The concession was part of broader US negotiations with China, which the White House said will accept higher tariffs and cooperate on rare-earth minerals.
“Senior administration officials are pretty clearly characterizing this as having been explicitly traded for what we got in those talks,” said Tobin Marcus, head of US policy and politics at Wolfe Research.
Huang has argued that restrictions in China mean American chipmakers will cede the immense market to local rivals, chiefly Huawei Technologies Co. White House AI adviser David Sacks has echoed that, calling for an American “tech stack” — a set of complementary hardware and software services that the nation can export and control. Sacks, a tech entrepreneur and venture capitalist, was critical in reversing recent semiconductor restrictions to Saudi Arabia and the United Arab Emirates, arguing that the Gulf powerhouses would otherwise turn to China for their growing AI ambitions.
“We are not selling the latest and greatest chips to China,” Sacks said in a Bloomberg Television interview on Tuesday. “The policy is nuanced, and it makes a lot of sense.”
But there’s another contingent who view chip bans as a key way to keep Beijing from advancing in what’s widely seen as an AI arms race. The abrupt about-face this week came as a shock to many China hawks in the administration and on Capitol Hill, leaving several privately fuming, people with knowledge of the matter said.
Many policymakers were in the dark on how the changes will be implemented and raced to get a better understanding of the mechanics, said these people, who asked not to be identified because they aren’t authorized to speak publicly on the matter.
The House select committee on China plans to seek clarification from the Commerce Department on the reversal, according to the panel’s Republican chairman, Representative John Moolenaar. “It is crucial that the US maintain its lead” and keeps advanced AI out of the hands of the Chinese Communist Party, he said in a statement.
US Commerce Secretary Howard Lutnick told CNBC that the policy change makes sense because Nvidia and AMD won’t be selling their latest chips in the market. “We want to keep having the Chinese use the American technology. They still rely upon it, and that’s key,” he said. “So we try to play that balance. We don’t sell them our best stuff.”
The US first restricted Nvidia’s sales in China in 2022, placing curbs designed to keep the most advanced AI resources from the Chinese military. In response, Nvidia designed new processors, including the H20. It’s an AI accelerator with certain components — such as memory access — deliberately limited to comply with US bans. Officials under President Joe Biden weighed the idea of placing restrictions on the H20 but ultimately didn’t.
Trump then went ahead with the curbs in April, citing national security concerns.
A month later, Huang said the US government was shooting itself in the foot with the policy. “All in all, the export controls were a failure. The facts would suggest it,” he told reporters in Taipei. He also said demand in China for AI chips would reach $50 billion in 2026 — a market that Trump basically kept his company out of.
Nvidia’s products are central to the creation and running of artificial intelligence software. The company has more than a 90% share in AI accelerators — chips that are the key component in giant data centers being built around the world.
Access to the chips has become a negotiating card for Trump during his trips to the Middle East, where he secured massive pledges from Gulf states to invest in the US. Along the way, he’s praised Huang for going further than some other tech CEOs, such as Apple Inc.’s Tim Cook.
During a trip to Riyadh, Saudi Arabia, Trump scanned the crowd for the tech luminaries who joined him for an event.
He spotted Huang. “Thank you very much, Jensen. I mean, Tim Cook isn’t here. But you are,” the president said. “What a job you’ve done.”
--With assistance from Laura Avetisyan, Brunella Tipismana Urbano, Alicia Diaz, Lucille Liu and Jessica Sui.
(Updates with Huang’s comments from Beijing in the 9th paragraph.)
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