Nvidia ($NVDA) reopened its biggest blocked market: Washington has signed off to license H20 AI chips for China, and Jensen Huang is sweetening the deal with a lean “RTX Pro” GPU built to slip under US export curbs.
Licences incoming. Nvidia says the US government “has assured” it will grant licences to ship its H20 GPU to China, clearing a path to restart deliveries “soon.” The chip had been frozen since April, following export-control tightening.
$15 B at stake. The ban forced a $5.5 B inventory write‑off and jeopardised roughly $15 B in forecast sales; restoring even part of that flow is a material boost to FY‑26 topline.
Made‑for‑China fallback. To hedge future clamp‑downs, Nvidia unveiled the RTX Pro GPU—a stripped‑down, “fully compliant” Blackwell‑class chip aimed at digital‑twin AI in smart factories and logistics. Pricing is expected well below H20
Huang’s Beijing charm‑offensive. “The Chinese market is massive, dynamic, and highly innovative … it is indeed crucial for American companies to establish roots here,” Huang told CCTV ahead of Wednesday’s supply‑chain expo.
CUDA lock‑in still rules. Domestic rivals (Huawei, Biren) are closing the hardware gap, but China’s internet giants still crave Nvidia silicon to stay on Nvidia’s CUDA software rails.
Macro thaw. The H20 reprieve lands as Beijing eases rare‑earth controls and Washington quietly relaxes EDA‑software curbs—signalling a tentative détente in the chip war.
Market Takeaways
- Revenue relief: China generated $17 B (13 % of FY‑25 sales). Even limited H20 volumes plus RTX Pro ramp could close the post‑export‑ban revenue hole in two quarters.
- Supply‑chain risk is now two‑way: Beijing’s HBM and rare‑earth levers remain live; investors should treat today’s thaw as tactical, not permanent.
- Valuation watch: Every $1 B in reclaimed China sales adds ~>$0.40 EPS (post‑write‑down). Expect analysts to edge FY‑26 targets higher once licences hit.
- Competitive ripple: Huawei Ascend road map forces Nvidia to keep discounting feature sets; margin pressure may show up first in data‑center gross margin mix.
Nvidia reports Q2 results in late August; guidance commentary on China licences is now the top swing factor for the print.
Disclosure: This article does not represent investment advice. The content and materials featured on this page are for educational purposes only.
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