The US government has greenlit the sale of Nvidia’s advanced H200 artificial intelligence chips to China, easing export restrictions in a move that balances economic interests with national security concerns. This decision, announced by the Department of Commerce on Tuesday, allows the chip giant to tap into the Chinese market under specific conditions aimed at preventing military use and ensuring domestic supply.
Under the revised policy, Nvidia can ship its H200 processors to China provided that there is sufficient supply available in the United States. Chinese customers must demonstrate adequate security measures and agree not to utilize the chips for military applications. Additionally, the Trump administration has imposed a 25% fee on these sales, with revenue directed to the US government, a unique tariff model that could set a precedent for future trade negotiations.
The H200, Nvidia’s second-most-advanced AI semiconductor, had been subject to export controls since January 2025 under the Biden administration’s AI Diffusion Rule, which sought to limit China’s access to cutting-edge technology. President Donald Trump reversed these restrictions last July, signaling a shift in policy to support American companies’ global competitiveness while addressing security risks through conditional approvals.
Nvidia has welcomed the approval, stating that it will benefit US manufacturing and jobs. CEO Jensen Huang had lobbied extensively for the move, arguing that access to global markets is crucial for maintaining America’s edge in AI development. The company’s spokesperson highlighted the positive impact on the US economy, emphasizing the creation of high-skilled employment opportunities.
In response, China has expressed opposition to what it views as the politicization of trade and technology. Chinese embassy spokesman Liu Pengyu criticized the US for disrupting industrial and supply chains, calling for mutual cooperation rather than restrictions. Despite this, Chinese tech firms are expected to seek H200 chips to bolster their AI capabilities, though Beijing has previously encouraged domestic alternatives to reduce reliance on foreign technology.
The approval comes amid ongoing tensions in the US-China trade war and the global race for AI supremacy. Some US officials have raised concerns that advanced chip sales could inadvertently aid China’s military advancements, potentially undermining American security. However, the Trump administration’s approach aims to carve out a middle ground, allowing economic engagement while imposing safeguards to protect national interests.
Industry analysts note that while Chinese companies may initially rely on Nvidia’s chips, the move could accelerate the development of homegrown semiconductors. Austin Lyons, a semiconductor analyst, pointed out that local firms will eagerly secure H200 units until domestic alternatives improve, highlighting the temporary nature of this dependency. Meanwhile, Marc Einstein from Counterpoint Research suggested that the tariff model might expand to other sectors, influencing broader trade policies.
Looking ahead, the revised export rules are scheduled to take effect on Thursday, with Nvidia poised to begin shipments under the new conditions. This development is likely to shape future US-China trade discussions, as both nations navigate the complex interplay between technology, economy, and security. The outcome will be closely watched by global markets and policymakers alike, setting the stage for further negotiations in the evolving geopolitical landscape.
