Exports Approved

President Trump announced that Nvidia would be allowed to sell its advanced H200 computer chips to China, with the US taking a 25% cut of sales.

Context

The Biden Administration blocked shipments of Nvidia's H200 chips and other advanced processors to China in 2022 over concerns they could be used for military applications. The H200 chip is nearly six times as powerful as Nvidia's H20 chip, which the Trump Administration initially halted sales of to China in April before reversing that decision in July after Nvidia CEO Jensen Huang lobbied the administration. The H200 is used for AI applications and advanced computing tasks.

Trump’s Approval

Trump said in a social media post on Monday that he informed Chinese President Xi Jinping that the US would allow Nvidia to ship the H200 chips to vetted customers in China and other countries while maintaining US national security.

Trump wrote that “$25% will be paid to the United States of America,” though the White House did not clarify whether that percentage referred to export sales revenue or another arrangement. Other chip manufacturers, such as AMD and Intel, will receive similar approvals, but the deal excludes Nvidia's most advanced Blackwell chip and the unreleased Rubin chip.

China's Response

Despite Trump’s approval, outlets reported that Beijing plans to limit access to the H200 chips as it works to become independent in chip manufacturing.

Chinese regulators discussed requiring buyers to go through an approval process, requesting permission to purchase the chips, and explaining why Chinese providers could not meet their needs. Chinese regulators could also apply additional measures to ensure the competitiveness of domestic chips, including potentially banning China's public sector from buying the H200 altogether.

Industry & Political Impact

The decision is a win for Nvidia, which estimated it could ship between $2B and $5B worth of chips to China per quarter. Chinese tech giants like Alibaba, ByteDance, and Tencent have been using more Chinese chips for basic AI functions, but still prefer Nvidia's products.

The decision faced bipartisan criticism from lawmakers in the US, who argued it would help China's AI industry catch up to America. A group of US senators introduced legislation last week that would block chip exports, including the H200, to China for 30 months.