ai chip breakthrough? china presses us to ease export limits ahead of trump-xi summit
Washington, Monday, 11 August 2025.
ahead of a potential summit between president trump and xi jinping, chinese officials are lobbying the us to relax export controls on high-bandwidth memory (hbm) chips. these chips are crucial for ai applications. this move could significantly impact nvidia, as hbm chips are vital for their ai graphic processors. the outcome could reshape nvidia’s access to the chinese market and influence the entire semiconductor supply chain, including tsmc. washington insiders suggest beijing fears current restrictions hinder chinese firms like huawei from advancing their ai capabilities.
export controls and market dynamics
The us has been restricting exports of advanced chips to china to hinder beijing’s ai and defense development [1][2][3]. these restrictions impact american firms’ ability to fully capitalize on china’s booming semiconductor market [1]. however, china remains a crucial revenue source for us chipmakers [1][2]. nvidia ceo jensen huang has warned that losing access to the chinese market could weaken the company’s industry leadership [7]. chinese domestic chip manufacturers are gaining traction with products from companies like huawei [7].
nvidia’s h20 chip and us export licenses
The us commerce department has started issuing export licenses for nvidia’s h20 ai chip to china [4][5]. this move comes after the us government previously revoked a ban on h20 chip exports to china in april [7]. the h20 chip was designed by nvidia specifically to comply with us ai chip export regulations [7]. nvidia had cautioned that restrictions could reduce its july quarter revenue by $8 billion [7] [alert! ‘The sources mention two different figures, $8 billion and $5.5 billion, for potential losses due to export restrictions. Further clarification is needed to reconcile these figures.’].
revenue sharing agreement
Nvidia and amd have reportedly agreed to remit 15% of their china chip sales revenue to the us government to secure export licenses [4][6]. this unprecedented arrangement marks a significant shift in us export control policy [4]. bernstein analysts estimate nvidia could generate $23 billion in revenue from h20 chip sales in china in 2025 [4][6]. this would mean nvidia potentially paying over $3 billion to the us government [4]. nvidia has stated it complies with us government regulations for global market participation [4][6].
chinese concerns and market impact
Chinese authorities have expressed concerns to nvidia about potential security risks associated with the h20 chip [5]. nvidia has stated its products do not contain any backdoors [5]. despite h20 chips receiving export licenses, chinese tech companies are hesitant to make large purchases [5]. the h20 chip’s performance is only 15% to 30% of nvidia’s flagship ai chip, h100 [5]. china worries that us hbm controls will impede chinese companies like huawei from developing their own ai chips [1][2].