Nvidia has secured U.S. government approval to resume sales of its H20 artificial intelligence chips to China, marking a strategic shift in the ongoing technology trade negotiations between Washington and Beijing [1][2].

Commerce Secretary Howard Lutnick emphasized the calculated nature of the chip sales, stating, "We don't sell them our best stuff, not our second best stuff, not even our third best. I think fourth best is where we have come out that we're cool" [5]. The H20 chip is deliberately designed to be technologically inferior to Nvidia's top-tier offerings, ensuring the U.S. maintains its technological leverage.

The decision is part of a broader diplomatic strategy, with Lutnick noting the sale is linked to negotiations over rare-earth metals. The U.S. government sees strategic value in keeping Chinese companies reliant on American technology stack, even if through less advanced chips [5].

Nvidia CEO Jensen Huang has been actively engaging with both U.S. and Chinese officials, recently praising China's AI ecosystem. He highlighted that China is home to 50 percent of the world's AI researchers and has a dynamic market for technological innovation [8].

The move is expected to restore significant revenue for Nvidia, with the company previously estimating potential losses of US$5.5 billion due to export restrictions [2]. The announcement has already positively impacted the company's stock, with shares jumping approximately 4% following the news [3].

This development signals a nuanced approach to technological competition, where the U.S. carefully manages technology transfer while maintaining strategic technological superiority.