Nvidia’s China strategy has shifted again. After saying in June that it planned to essentially withdraw from the Chinese market, the company is now filing an application to restart sales of its H20 AI chip to China.
The change is not happening in isolation. U.S. Commerce Secretary Howard Lutnick said Tuesday that Nvidia’s plan is connected to ongoing trade discussions with China over rare-earth elements, according to Reuters.
Why rare-earth elements matter here
Rare-earth elements have become a pressure point in the current trade debate between the U.S. and China. The source article identifies lanthanum and cerium as examples of these elements, which are largely mined in China.
They are necessary components in technology, including rechargeable batteries for electric vehicles. That makes them relevant beyond the chip industry itself: when rare-earth elements become part of trade talks, the effects can reach across several technology supply chains.
In this case, Lutnick linked those discussions to Nvidia’s attempt to resume H20 AI chip sales in China. The connection suggests that chip exports and rare-earth access are being considered as parts of the same broader trade conversation.
Nvidia reverses course on China
The H20 move marks a reversal from Nvidia’s earlier position. In June, the company announced plans to essentially withdraw from the Chinese market. Now it is seeking approval to restart sales of the H20 AI chip there.
AMD is also moving in a similar direction. The source article says AMD plans to restart sales of its MI308 AI chip in China too.
That puts both Nvidia and AMD inside a shifting policy environment. The U.S. is still trying to settle what its AI chip export rules will look like, and there has not been a formal update since the Trump administration formally rescinded the Biden administration’s AI Diffusion Rule in May.
The export-control debate is still unsettled
The possible restart of Nvidia H20 sales has drawn criticism. Congressman Raja Krishnamoorthi said the decision “would not only hand our foreign adversaries our most advanced technologies, but is also dangerously inconsistent with this administration’s previously-stated position on export controls for China,” according to Reuters.
Lutnick took a different view in a CNBC interview on Tuesday. He said China is only getting Nvidia’s “fourth best” chip.
“We don’t sell them our best stuff, not our second best stuff, not even our third best,” Lutnick said in the interview.
That contrast captures the core tension around AI chip exports to China. One side frames the issue around the risk of transferring advanced technology. The other argues that the products at issue are not Nvidia’s top chips.
More China-focused chip moves may follow
The H20 application comes less than a week after it was rumored that Nvidia would design and release a new AI chip specifically for the Chinese market. The reported purpose was to resume business in the country without violating U.S. chip export rules.
At the same time, the Trump administration was rumored to be considering further restrictions on AI chip exports to countries like Thailand and Malaysia, Bloomberg reported last week. The reported goal was to prevent smuggling.
Malaysia implemented trade permits on U.S.-made AI chips on Monday. That adds another layer to a policy landscape that is still moving, even as companies look for ways to continue selling into China.
TechCrunch reached out to Nvidia for comment. For now, the key facts are clear: Nvidia wants to restart H20 AI chip sales in China, AMD plans to restart MI308 sales there too, and rare-earth element talks are part of the wider trade context around those decisions.