The U.S. has reversed key restrictions on AI chip exports to China, allowing Nvidia and AMD to resume sales of certain processors. The move, following intense lobbying by Nvidia CEO Jensen Huang and ongoing trade negotiations with Beijing, signals a rare retreat in Washington’s trade war stance and promises fresh revenue opportunities for the chipmakers.

Nvidia’s Jensen Huang successfully persuaded U.S. officials, including President Donald Trump, that restricting AI chip exports to China was harming American competitiveness. Following recent meetings in Washington and Beijing, Nvidia and AMD announced they expect to resume shipments “soon” of their China-specific H20 and MI308 chips, respectively. These chips comply with previous U.S. export restrictions by offering downgraded capabilities.

The Commerce Department confirmed AMD’s export applications are moving forward, while Nvidia reported it has received assurances of license approval.

Nvidia shares jumped 4%, and AMD rose over 6% following the announcements, while the semiconductor sector broadly gained. Analysts said the approvals mark a positive signal for broader U.S.-China trade negotiations, as the Biden and Trump administrations had previously tightened controls to prevent advanced AI technologies from reaching Beijing.

Nvidia had previously warned that continued restrictions could cede market dominance to Chinese rivals like Huawei. Huang argued that U.S. firms must remain engaged in China’s $50 billion AI chip market to maintain technological leadership.

Ongoing Debate Over AI Controls

Despite the relaxation, Nvidia and AMD remain barred from selling their latest, most advanced chips to China. Instead, exports are limited to older or modified versions suitable for less sensitive applications. Some U.S. officials view the move as a calculated compromise to keep American technology in China’s supply chains without empowering its military ambitions.

Treasury Secretary David Bessent described the policy as a “bargaining chip” in wider U.S.-China negotiations, while critics in Congress voiced concern over potential security risks.