Nvidia H20 GPUs stuck in U.S. export backlog as Commerce Department faces worst licensing delay in 30 years due to staffing cuts and communication breakdowns

Nvidia’s H20 GPUs are caught in a severe bottleneck within the U.S. Commerce Department’s export licensing process, with officials reporting the worst backlog in over 30 years. This delay is preventing the shipment of billions of dollars worth of advanced chips and other technology to Chinese firms, despite ongoing efforts by Nvidia to expand its presence in the region. According to multiple sources familiar with the situation, the Commerce Department is facing a critical backlog of export license applications, primarily due to staffing shortages and internal communication breakdowns. These issues have stalled approvals for key shipments, including the H20, a specialized GPU designed for AI training and inference that complies with U.S. export restrictions while still offering significant performance for Chinese customers. The H20 was developed as a workaround to U.S. export controls that have restricted the sale of more powerful Nvidia chips like the H100 and B100 to China. While the H20 is less capable than those models, it remains a high-demand product for Chinese tech companies building AI infrastructure. However, without a valid export license, no shipment can proceed. This situation underscores the ongoing tension in U.S.-China trade relations, particularly around access to advanced computing hardware. The Biden administration has maintained and even expanded many of the export controls initiated under the previous Trump administration, citing national security concerns over China’s growing AI capabilities. The delays are not only impacting Nvidia’s revenue potential but also affecting broader supply chains and customer commitments. Chinese firms that had planned to deploy these GPUs for large-scale AI projects are now facing uncertainty, while U.S. companies risk losing market share to competitors who may find alternative pathways to supply the region. The issue highlights a deeper systemic challenge: even as the U.S. seeks to maintain technological superiority, its own regulatory machinery is struggling to keep pace with the speed of global tech demand. With staffing cuts and fragmented coordination across agencies, the export review process has become a major obstacle to both national policy goals and commercial outcomes. As negotiations between Washington and Beijing remain stalled, the fate of these licenses—and the future of U.S. semiconductor exports to China—hangs in the balance.