Commerce Secretary Gina Raimondo said that Nvidia could and should sell GPUs in China, as most AI applications using them would be commercial in nature.

"What we cannot allow them to ship is the most sophisticated, highest processing power AI chips, which would enable China to train their frontier models," she said.

 She added that after talking to Nvidia CEO Jensen Huang, it's "crystal clear" the outfit wants to play by the rules.

The US government has grown increasingly concerned about the potential use of AI models in military applications. In October, the Biden administration introduced tougher performance limits on GPUs and AI accelerators sold to the Middle Kingdom. Those rules meant that even Nvidia’s A800 and H800 GPUs, which were developed specifically to comply with the previous round of restrictions from 2022, were no longer allowed to reach China.

Nvidia is the largest supplier of accelerators used in AI applications and was among the hardest hit by the administration’s October 2023 changes. Shortly after the rules were made public, it published an SEC filing warning investors that a large portion of its data centre lineup was likely to exceed the new performance caps.

The rules hadn't even gone into effect when the government pre-emptively ordered Nvidia to cease all remaining shipments of affected GPUs.

Nvidia planned a trio of GPUs that limbo right under the performance caps, however, the most powerful of those machines, the H20, has been delayed until next year.