Nvidia's H20 Chip Export Deal Faces Implementation Delays
American chip designer Nvidia has revealed that its anticipated H20 chip exports to China have not materialized despite securing a groundbreaking agreement with the White House. The company confirmed that no H20 chips have been shipped to Chinese customers in recent months, and none are expected in the coming quarter.
Unprecedented Revenue-Sharing Arrangement
The deal, announced in July 2025, represented a novel approach to technology export controls. In exchange for permission to export the specialized H20 chips to China, Nvidia agreed to transfer 15% of the revenue from these sales to the U.S. Treasury. This arrangement marked the first time a private company had entered into such a revenue-sharing agreement with the U.S. government for technology exports.
Technical and Political Complexities
The H20 chips were specifically designed for the Chinese market to comply with U.S. export restrictions while still providing advanced computing capabilities. These chips are based on Nvidia's Hopper architecture and are essential for artificial intelligence development and data center operations.
According to Nvidia's Chief Financial Officer Colette Kress, "The U.S. government has been reviewing licenses since late July to allow H20 chip sales to Chinese customers." While approvals have been granted for some Chinese clients, the actual delivery of chips has been suspended pending formalization of the revenue-sharing mechanism.
Chinese Market Resistance
Compounding the situation, Chinese authorities have reportedly been pressuring domestic companies to avoid purchasing the H20 chips. Although not officially banned, acquiring these American-made chips has become "politically incorrect" according to Chinese data center operators speaking to financial media.
Financial Implications and Market Position
Nvidia estimates potential sales of $2-5 billion in H20 chips over the next three months, depending on political developments. The company recently became the world's most valuable publicly traded company with a market capitalization exceeding $4.36 trillion, driven by massive demand for its AI-optimized chips.
Over the past six months, Nvidia reported profits exceeding $45 billion, underscoring its dominant position in the semiconductor industry and the critical role its technology plays in artificial intelligence development worldwide.