President Donald Trump announced the US will allow Nvidia to sell its H200 AI chips to China, with a 25% government fee per sale. This marks a shift in US semiconductor export policy, highlighting the importance of AI chips in global economic and political competition.
After the announcement, Nvidia’s stock rose about 2% in after-hours trading, adding to earlier gains. Investors believe that regaining access to China, a major semiconductor market, could increase revenue while still protecting US security interests.
Trump said the Commerce Department is finalizing the plan and that similar rules will apply to other major US chipmakers such as AMD and Intel. He also said that Chinese President Xi Jinping had been informed about the decision and responded positively, though few official details have been released.
The policy aims to let US firms remain competitive while keeping advanced technology secure. The H200, Nvidia’s second-most-advanced AI chip, can be sold to China, but the latest Blackwell and future Rubin chips remain banned. This approach is intended to give the US a technological edge while maintaining commercial presence in China.
As a result of this policy, Nvidia and others are allowed to remain in China without giving up on their most advanced products. Some officials have said that a total ban would boost Chinese companies like Huawei and limit US firms’ access to the market.
NVIDIA said that selling the H200 to approved commercial buyers “strikes a thoughtful balance” between national security and economic competition. Before being exported to China, the chips manufactured in Taiwan must first be imported into the US for government inspection. The 25% government fee is then collected as an import tariff during this US entry review before the chips are approved for re-export to China.
However, the decision has faced strong political criticism. Some lawmakers, including the House China Select Committee, are concerned that even older AI chips could help China’s military surveillance and data analysis. Others warn that Chinese companies may copy the technology, potentially harming US firms over time.
Independent analysts point out that the H200 is much more powerful than the chips China can currently buy. It is estimated to be almost six times faster than the approved H20 chip, though it still lags behind Nvidia’s newest chips used in the US. For Chinese companies, this difference matters: the H200 is better than local options, so it remains appealing even as China works to become self-reliant in semiconductors. Regulators have raised security concerns about Nvidia products before, and Chinese authorities have encouraged local firms to rely less on downgraded foreign processors. This ongoing tension creates uncertainty about the actual demand.
The timing of these developments is notable. On the same day, the US Justice Department said it had broken up a Chinese-linked group accused of smuggling restricted Nvidia chips worth over $160 million. This case highlights the value of high-end AI hardware and the difficulty of fully enforcing export rules.
For global markets, this decision shows that AI chips are now both important strategic assets and key commercial products. How Washington manages this balance will affect not only US-China relations but also competition throughout the semiconductor industry.
Brief Summary
The US will allow Nvidia to export H200 AI chips to China under a 25% fee, but will keep the latest processors restricted. The move seeks to balance national security with economic interests, allowing US firms to retain partial access to the Chinese market while curbing local Chinese competitors amid ongoing debates over risks.
Source: Nvidia Newsroom
