The Trump administration has formally approved the export of Nvidia's advanced H200 artificial intelligence chips to China, but under a new set of strict conditions that include a 25% fee paid to the U.S. government and rigorous testing requirements. The policy marks a reversal from the Biden-era approach, which had completely blocked sales of such advanced AI chips.
Under the new rules, H200 chips destined for China must undergo performance testing by an external laboratory before shipment. Chinese buyers are capped at receiving no more than half of the total chips sold to American customers. Nvidia is required to demonstrate sufficient H200 chip availability in the United States, while Chinese purchasing companies must prove they have adequate security measures and pledge not to use the chips for military purposes.
President Donald Trump, who announced the policy framework last month, stated the sales would proceed "under conditions that allow for continued strong National Security." However, the move has drawn criticism from both U.S. political parties. Critics argue that exporting these high-performance chips could bolster Beijing's military capabilities and erode America's technological lead in AI.
Jay Goldberg, an analyst at Seaport Research, described the export limits as a "middle-ground solution" but expressed skepticism about enforcement, calling it "a Band-Aid, a temporary attempt to cover the huge gap among the U.S. government’s export policy makers." Saif Khan, former director of technology and national security on the White House National Security Council under Biden, warned the rule would provide a major boost to China's AI programs, equating the potential two million chip exports to the computing power owned by a typical U.S. frontier AI company.
The approval comes amid massive Chinese demand, with technology firms having already placed orders for over 2 million H200 chips at approximately $27,000 each. This demand far outstrips Nvidia's current inventory of roughly 700,000 chips. Nvidia CEO Jensen Huang recently confirmed the company is ramping up H200 production, citing strong global demand that is even pushing up rental prices for chips in cloud computing centers.
However, the situation remains highly fluid and contested. Conflicting signals are emerging from Beijing. Reports this week indicate Chinese customs authorities have instructed agents that the H200 chips are not permitted to enter the country. Simultaneously, Chinese government officials summoned domestic tech companies, explicitly telling them not to purchase H200 chips unless "strictly necessary," with some sources describing the tone as so severe it amounts to a de facto ban for now.
Other reports suggest a narrower allowance, where China might approve H200 purchases only for special circumstances like university R&D partnerships. This uncertainty has directly impacted Nvidia's stock, which fell around 2% following the news, trading near $181.
The H200 has become a geopolitical flashpoint. Supporters of the exports, including White House AI director David Sacks, argue that selling advanced chips to China could discourage domestic rivals like Huawei from accelerating efforts to catch up. Critics fear it strengthens China's strategic position. The renewed restrictions appear to be benefiting China's domestic semiconductor sector, with Chinese chipmaking stocks rising. This sentiment was reinforced when AI firm Zhipu unveiled a new AI model trained entirely on locally-made Huawei chips, signaling a push for homegrown alternatives.
