In a surprising reversal, President Donald Trump granted Nvidia permission to ship its H200 artificial intelligence chips to China—but the deal comes with strings attached, and Beijing may not cooperate.
The announcement, made via Truth Social on Sunday, caps weeks of deliberations about whether to ease chip export restrictions that have cost Nvidia billions in Chinese sales.
The Deal: 25% Revenue Share
Under the new arrangement, the U.S. government will collect 25% of all revenue from Nvidia's H200 sales to China. Additionally, only H200 units that are approximately 18 months old will be eligible for export.
The H200, launched in 2023, is Nvidia's most powerful chip available outside of its latest-generation Blackwell series. The Blackwell chips will remain restricted from the Chinese market, Trump confirmed.
Trump also indicated the Department of Commerce is finalizing similar export frameworks for AMD, Intel, and other American chipmakers.
Beijing's Response: Not So Fast
Despite U.S. approval, Chinese regulators are weighing new limits on access to the H200, according to the Financial Times.
Officials from China's Ministry of Industry and Information Technology have indicated they will implement "administrative measures" to limit H200 access by state-owned enterprises and entities receiving government funding.
The restrictions would effectively channel Chinese AI development toward domestic semiconductor manufacturers—particularly Huawei and its Ascend series of AI accelerators.
The potential Chinese restrictions represent a significant obstacle to Nvidia's anticipated revenue windfall. If Beijing blocks its own companies from purchasing H200 chips, Trump's export approval becomes largely symbolic.
Political Backlash
The decision has drawn criticism from lawmakers concerned about technology transfer to China.
Senator Elizabeth Warren criticized the move: "Trump is letting NVIDIA export cutting-edge AI chips that his own DOJ revealed are being illegally smuggled into China."
The SAFE Chips Act, recently introduced in Congress, would block advanced AI chip shipments to China for 30 months. The bill's future remains uncertain.
What This Means for Nvidia Investors
Nvidia shares dipped roughly 1% in early Tuesday trading as markets digested the mixed signals.
For investors, the situation highlights several realities:
- China revenue remains uncertain: Even with U.S. approval, Beijing's response could limit actual sales
- Regulatory risk persists: The chip export framework could change with any shift in U.S.-China relations
- Blackwell remains restricted: Nvidia's newest and most advanced chips still can't be sold to China
- Revenue share reduces margins: The 25% government take cuts into profitability on any Chinese sales
However, any China sales are better than the near-total freeze under previous restrictions. The H200 approval represents a potential revenue stream that was previously blocked entirely.
The Bigger Picture
The semiconductor industry remains at the center of U.S.-China competition. Both nations view AI chip technology as strategically critical, making normal commercial relationships difficult.
For Nvidia, which once generated roughly 20% of revenue from China, the market has become a geopolitical minefield. The company has been developing China-specific chips that comply with U.S. export rules, but these have faced their own regulatory challenges from both sides.
Investors should expect continued volatility as the two nations jockey over semiconductor access. The H200 approval is a step toward normalization—but Beijing's potential counter-restrictions show the path remains complicated.
What to Watch
In the coming weeks, monitor:
- Official announcements from China's Ministry of Industry and Information Technology
- Nvidia's commentary on China outlook during future earnings calls
- Progress on the SAFE Chips Act in Congress
- Similar export frameworks for AMD and Intel
The U.S.-China chip war isn't ending anytime soon. This week's developments are just the latest chapter.
