WASHINGTON, D.C.: The U.S. Commerce Department has begun issuing licenses allowing Nvidia to ship its H20 chips to China, a U.S. official told Reuters, reopening access to a key market for the AI leader after months of restrictions.

The decision follows Washington's reversal last month of an April ban on H20 sales. Nvidia developed the chip specifically for China to comply with Biden-era export controls on advanced AI hardware.

Nvidia has warned the curbs would cut US$8 billion from its July-quarter sales. CEO Jensen Huang met with President Donald Trump this week, two sources familiar with the matter said.

A spokesperson for Nvidia declined to comment, and the White House did not respond to a request for comment. In July, Nvidia said it had applied to resume H20 shipments and had been assured licenses would be granted soon.

It remains unclear how many licenses have been issued, which Chinese firms can receive the chips, or the total value of shipments approved.

Nvidia disclosed in April that it expected a $5.5 billion charge tied to the H20 restrictions, but later said the actual impact for the first quarter was $1 billion lower, as some materials were reused. The Financial Times first reported Friday's update.

China has raised security concerns over the H20, prompting Nvidia to state last month that its products contain no "backdoors" enabling remote access or control.

Exports of Nvidia's other advanced AI chips to China remain restricted under rules from successive U.S. administrations aimed at slowing Beijing's AI and defense development.

While such curbs have limited U.S. companies' ability to meet surging demand from China, one of the largest semiconductor markets, the country still accounts for a significant share of American chipmakers' revenue.

Huang has warned Nvidia's competitive edge could erode without Chinese sales, as domestic developers are courted by rivals like Huawei Technologies, which produces its own chips in China.

In May, Nvidia said the H20 generated $4.6 billion in sales in the first quarter, with China contributing 12.5 percent of total revenue during that period.