A backlog at the Commerce Department is reportedly stalling Nvidia’s H20 chip licenses

In a significant development for the tech industry, the U.S. Commerce Department is experiencing a backlog that is hindering Nvidia's ability to secure licenses for its H20 AI chips. Earlier this July, Secretary of Commerce Howard Lutnick had authorized chip manufacturers, including Nvidia, to resume selling specific AI chips to China. However, reports from Reuters indicate that Nvidia has yet to obtain the necessary license for its H20 chips. The delays are attributed to internal challenges within the Commerce Department, including staff shortages and communication issues with industry stakeholders. As a result, the processing of licensing applications has slowed considerably. Adding to the complexity of the situation, national security experts are pressing the current administration to impose restrictions on Nvidia’s sales to China, citing potential national security risks associated with the H20 AI chips.