Aug 8 (Reuters) - The commerce department has started

issuing licenses to Nvidia ( NVDA ) to export its H20 chips to

China, a U.S. official told Reuters on Friday, removing a

significant hurdle to the AI bellwether's access to a key

market.

The U.S. last month reversed an April ban on the sale of the

H20 chip to China. The company had tailored the microprocessor

specially to the Chinese market to comply with the Biden-era AI

chip export controls.

The curbs will slice $8 billion off sales from its July

quarter, the chipmaker has warned.

Nvidia ( NVDA ) CEO Jensen Huang met with Trump on Wednesday, two

sources familiar with the matter told Reuters.

A spokesperson for Nvidia ( NVDA ) declined comment. A White House

spokesman did not immediately respond to a request for comment.

The company said in July it was filing applications with the

U.S. government to resume sales to China of the H20 graphics

processing unit, and had been assured it would get the licenses

soon.

It is unclear how many licenses may have been issued, which

companies Nvidia ( NVDA ) is allowed to ship the H20s to, and the value

of the shipments allowed.

Nvidia ( NVDA ) disclosed in April that it expected a $5.5 billion

charge related to the restrictions. In May, Nvidia ( NVDA ) said the

actual first-quarter charge due to the H20 restrictions was $1

billion less than expected because it was able to reuse some

materials.

The Financial Times first reported Friday's developments.

Nvidia ( NVDA ) said last month that its products have no "backdoors"

that would allow remote access or control after China raised

concerns over potential security risks in the H20 chip.

BIG MARKET

Exports of Nvidia's ( NVDA ) other advanced AI chips, barring the

H20, to China are still restricted.

Successive U.S. administrations have curbed exports of

advanced chips to China, looking to stymie Beijing's AI and

defense development.

While this has impacted U.S. firms' ability to fully address

booming demand from China, one of the world's largest

semiconductor markets, it still remains an important revenue

driver for American chipmakers.

Huang has said the company's leadership position could slip

without sales to China, where developers were being courted by

Huawei Technologies with chips produced in China.

In May, Nvidia ( NVDA ) said the H20 had brought in $4.6 billion in

sales in the first quarter and that China accounted for 12.5% of

overall revenue during the period.

(Reporting by Karen Freifeld, Arsheeya Bajwa in Bengaluru and

Max A. Cherney in San Francisco; Editing by Alan Barona and

Sriraj Kalluvila)