Nvidia’s resumption of AI chips sales to China tied to rare earths deal – report

Nvidia’s (NASDAQ:NVDA) plans to resume sales of its H20 AI chips to China are tied to ongoing U.S.-China trade talks involving rare earth minerals, Commerce Secretary Howard Lutnick told Reuters on Tuesday.

Lutnick said the agreement was part of a broader deal “with the magnets,” referring to President Trump’s efforts to restart rare earth shipments to U.S. manufacturers.

Nvidia (NASDAQ:NVDA) confirmed it is filing for U.S. export licenses and has been assured approvals are coming. The move marks a reversal of April’s export restrictions aimed at blocking advanced AI chip sales to China on national security grounds.

The resumption plan has already triggered a rush among Chinese companies to secure H20 chips, Reuters said, citing sources. These chips are the most powerful Nvidia (NVDA) can legally sell in China but are significantly less capable than versions sold elsewhere, due to restrictions imposed during Trump’s first term and continued under President Biden.

CEO Jensen Huang, currently in Beijing and set to speak at an event Wednesday, has cautioned that Nvidia’s dominance could erode if it cannot sell to Chinese developers, who are being aggressively targeted by Huawei with domestically made chips.

Rival chipmaker AMD (AMD) also said the U.S. Commerce Department will review its license applications to export MI308 chips to China. AMD shares rose 7% Tuesday after announcing plans to resume shipments once licenses are granted.

Shares of Nvidia (NVDA) closed 4% higher on Tuesday, while AMD rose 6.4%.