The US Treasury Secretary Scott Bessent confirmed that the permission granted to Nvidia to sell the H20 high-end chips to China was a condition put forward by Beijing during negotiations with Washington.
On Monday, Nvidia announced that the US government would issue a sales license for the high-end H20 artificial intelligence chips to Chinese companies.
H20 is an artificial intelligence (AI) accelerator card introduced by Nvidia for the Chinese market at the end of 2023. It was the most advanced AI chip legally available to Chinese buyers for large model training and inference. However, starting from April 2025, this chip exclusively for China was placed on the US export control list and required a license for export.
Nvidia stated on Monday that following the issuance of the license by the Commerce Department, they would be able to continue selling H20 chips to China and quickly resume deliveries of the chip to China. This chip designed specifically for Chinese customers has been a bestseller in China since 2024.
In an interview with Bloomberg on Tuesday, Treasury Secretary Bessent confirmed this development and stated that granting such licenses was one of the negotiation conditions between Beijing and the Trump administration.
Bessent said, “Because I can tell you, we don’t want to see the ‘Digital Silk Road’ rising around the world, where other countries or China are displacing our American chip manufacturers.”
When asked why the high-end AI chip from Nvidia, banned for export by the Trump administration in April, prompted authorities to change the policy in July, Bessent replied, “You could say this was a bargaining chip we used in negotiations in Geneva and London. Like a piece of a puzzle. They have what we want. We also have what they want, and we are currently in a very advantageous position.”
The Treasury Secretary also stated that the 90-day US-China tariff truce period scheduled to end in August would be flexible and that negotiations between the US and China were still ongoing with “smooth progress.”
He expects to continue trade talks with China in a third country in the coming weeks. Bessent serves as the lead negotiator for trade talks with China, playing a leading role in negotiations between Washington and Beijing.
Bessent’s remarks may help alleviate investors’ concerns. If tariffs return to their destructive levels prior to the truce in less than a month, investors fear further disruption in trade between the two countries.
Bessent expressed his desire to meet soon with Chinese Vice Premier He Lifeng, possibly in a third country, either before or after a meeting of Chinese leaders in early August.
The US trade negotiators met with Chinese officials in Geneva in May, agreeing to reduce overall tariff rates. In June, they held further talks in London, reaching a resolution on relaxing export controls for chips and rare earths.
The Wall Street Journal reported that gaining access to chips and advanced technology has been a top priority for Chinese negotiators. Informed sources familiar with US thinking said that Beijing viewed the US decision to once again allow more Nvidia chips to flow into China as a gesture of goodwill in US-China trade negotiations.
According to the sources, Nvidia CEO Jensen Huang tried to convince President Trump during a meeting at the White House last week to allow Nvidia to continue doing business with China and tap into local AI talent.
The sources said Huang told Trump that Nvidia should be allowed to freely sell its technology to most parts of the world so that American companies could dominate AI instead of Chinese companies. They mentioned that Huang also discussed similar topics with US Commerce Secretary Howard Lutnick.
According to the US tech news media outlet “The Information,” Chinese companies including ByteDance, Alibaba, and Tencent ordered at least $16 billion worth of H20 chips in the first quarter of 2025. The report mentioned that many of these orders were for upgraded versions integrated with the high-bandwidth memory used in Nvidia’s Blackwell series.
Huang is currently visiting Beijing. This is his third visit to China this year, drawing scrutiny from Washington. Last week, two US senators – Republican Jim Banks and Democrat Elizabeth Warren – wrote to Huang, urging him not to meet with companies collaborating with the Chinese military or intelligence agencies.