July 15, 2025 – U.S. Commerce Secretary Howard Lutnick, talking on the Pennsylvania Vitality and Innovation Summit in Pittsburgh on July 15, 2025, acknowledged that the Trump administration accredited Nvidia’s resumption of H20 AI chip gross sales to China as a result of it’s only their “fourth finest” chip, far much less superior than Nvidia’s top-tier choices. In an interview with CNBC’s Brian Sullivan, Lutnick emphasised, “We don’t promote them our greatest stuff, not our second finest stuff, not even our third finest,” highlighting the technique to offer China with the H20 chip—behind Nvidia’s Blackwell, H100, and H200 chips—to keep up U.S. technological dominance whereas fostering dependency on American tech.
The choice reverses an April 2025 ban on H20 exports, prompted by a preliminary U.S.-China commerce deal in June 2025, the place China agreed to renew rare-earth magnet exports. Lutnick defined that permitting gross sales of the much less highly effective H20 chip ensures Chinese language corporations stay reliant on the U.S. “tech stack,” discouraging funding in home options like Huawei’s Ascend 910C. Nvidia CEO Jensen Huang, who met President Trump final week, supported this strategy, arguing it prevents China from constructing homegrown infrastructure and famous the Chinese language navy doesn’t use Nvidia chips. The H20, launched in 2022 to adjust to Biden-era export controls, has lowered GPU cores and bandwidth however has confirmed efficient for corporations like DeepSeek, whose R1 mannequin succeeded regardless of the chip’s limitations.
The transfer has sparked debate. Senator Elizabeth Warren urged tighter restrictions, citing nationwide safety dangers as Chinese language corporations like Tencent and Alibaba stockpile H20 chips, doubtlessly limiting U.S. startups’ entry. Conversely, Lutnick argued that managed gross sales maintain China “one step behind” whereas securing financial advantages, with Nvidia beforehand estimating $8 billion in potential H20 gross sales for the present quarter. Chinese language tech shares, together with Alibaba and Tencent, rose 1-2% on the Cling Seng index following the announcement.