Nvidia Resumes H20 Chip Sales Amid Rare Earth Trade Negotiations

Rare earth elements seem to be influencing Nvidia's recent stance on China.

Following its June announcement to largely exit the Chinese market, the semiconductor and AI giant has reversed its decision, confirming it has filed to resume sales of its H20 AI chip in China.

According to Reuters, U.S. Commerce Secretary Howard Lutnick stated on Tuesday that Nvidia's plan to sell its H20 AI chips is connected to ongoing trade negotiations with China concerning rare earth elements. AMD also intends to restart sales of its MI308 AI chip in the country.

Rare earth elements such as lanthanum and cerium, predominantly mined in China, are essential components for modern technology, including electric vehicle rechargeable batteries. These elements have become a central issue in current U.S.-China trade discussions.

However, this trade development has drawn some criticism.

According to Reuters, Congressman Raja Krishnamoorthi said in a statement that 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."

Lutnick, however, remains unconcerned, telling CNBC on Tuesday that China would only be receiving Nvidia's "fourth best" chip.

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"We don't sell them our best technology, not our second best, and not even our third best," Lutnick remarked during the interview.

This update arrives shortly after speculation suggested Nvidia was designing a new AI chip specifically for the Chinese market, enabling a return to business there without breaching U.S. export controls.

The United States continues to define its AI chip export regulations. The Trump administration officially revoked the Biden administration's AI Diffusion Rule in May, and a formal replacement has yet to be announced.

Bloomberg reported last week that the Trump administration was reportedly considering tighter restrictions on AI chip exports to nations like Thailand and Malaysia to curb smuggling. Malaysia responded by imposing trade permits on U.S.-made AI chips starting Monday.

TechCrunch has contacted Nvidia for a statement.