Nvidia could regain a key market in China after U.S. regulatory changes expanded the Validated End-User (VEU) program. This update allows approved Chinese data centers to purchase advanced GPUs from U.S. companies under strict oversight, even with export controls in place.

The Biden administration’s initial ban on exporting high-performance GPUs to China severely impacted Nvidia, reducing its sales in the country. By including data centers in the VEU program, Nvidia can sell hardware to pre-approved Chinese entities, subject to rigorous security checks and multi-agency reviews.

Under this program, exporters like Nvidia can bypass lengthy individual licensing processes, opting instead for a more streamlined general authorization. However, sales are only allowed once a thorough vetting process ensures security measures are in place. This includes approval from the Departments of Commerce, Defense, Energy, and State, along with on-site compliance checks.

According to Alan F. Estevez, Undersecretary of Commerce for Industry and Security, the program will ensure that any approved authorizations include “appropriate safeguards and security measures” to prevent U.S. technologies from being misused.

This development is welcome news for semiconductor companies eager to continue doing business in China while adhering to U.S. export restrictions. The collaboration between the U.S. government and industry aims to build a secure global tech ecosystem that balances innovation with national security.

The assistant secretary of the Commerce for Export Administration, Thea D. Rozman Kendler, emphasized the significance of AI as a “dual-use technology,” explaining that partnerships with industry and governments are critical for fostering a secure technological environment.

In short, this shift represents a major opportunity for Nvidia to reclaim lost market share, provided it meets the strict requirements laid out under the VEU program.