Nvidia's CEO strikes deal with Trump to save China chip exports

2025-04-10 nvidia

washington, Thursday, 10 April 2025.
Jensen Huang, Nvidia’s CEO, has reportedly negotiated an agreement with the Trump administration concerning H20 AI chip exports to China. This deal involves Nvidia investing in new AI data centers within the U.S. The H20 is Nvidia’s most advanced AI chip still eligible for export to China. Chinese firms like ByteDance, Alibaba and Tencent have already placed orders worth $16 billion. This decision follows pressure from lawmakers to tighten restrictions after DeepSeek unveiled a breakthrough AI chatbot using H20 chips.

Stock market reaction

News of the potential agreement spurred a significant surge in Nvidia’s stock price [5]. On April 9, 2025, the stock jumped nearly 19% [5]. This positive market reaction reflects investor confidence in Nvidia’s ability to maintain its revenue streams from China, a key market for its data center sales [5]. Previously, China accounted for approximately 20% of Nvidia’s data center sales [5]. The potential loss of this market due to stricter export controls had been a major concern for investors [GPT].

Financial impact and analysis

Nvidia’s revenue has seen substantial growth, increasing to over $130 billion in 2024, a 114% year-over-year increase from $27 billion in 2023 [5]. Net income also expanded significantly to nearly $73 billion, up from less than $5 billion in 2023 [5]. The ability to continue selling H20 chips in China supports Nvidia’s capacity to sustain this growth trajectory [5]. However, Nvidia CEO Jensen Huang noted that export controls have reduced potential China sales to about half of what they were previously [5]. Despite this reduction, maintaining access to the Chinese market is crucial for Nvidia’s financial performance [GPT].

Strategic implications for Nvidia

The agreement with the Trump administration offers Nvidia a strategic advantage by allowing it to navigate export restrictions while investing in U.S.-based AI infrastructure [1][7]. This approach addresses both national security concerns and Nvidia’s business interests [7]. By investing in U.S. data centers, Nvidia aligns itself with the broader trend of increasing investment in AI infrastructure by major tech companies [1]. Microsoft, for example, has pledged $80 billion for AI data centers in its 2025 fiscal year, with 50% allocated for the U.S. [1].

Competitive landscape and challenges

Despite securing a deal for H20 chip exports, Nvidia faces ongoing competitive pressures and regulatory scrutiny [4]. The H20 chip is less powerful than Nvidia’s most advanced offerings and is tailored to meet existing export restrictions [3]. This means that while Nvidia can still access the Chinese market, it is doing so with a product that is not its top-tier technology [3]. Furthermore, the Trump administration’s stance on trade, including potential tariffs and demands on companies like TSMC, introduces uncertainty [1]. TSMC was allegedly told it would face a 100% tax if it didn’t build in the U.S. [1].

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ai chips export controls