Trump approves Nvidia H200 AI chip sales to China amid security concerns

Key topics:Trump allows Nvidia to sell H200 AI chips in China with 25% tariff.Move sparks debate over U.S. national security and China’s AI growth.Nvidia gains potential billions, while Congress and senators express concern..Sign up for your early morning brew of the BizNews Insider to keep you up to speed with the content that matters. The newsletter will land in your inbox at 5:30am weekdays. Register here.Support South Africa’s bastion of independent journalism, offering balanced insights on investments, business, and the political economy, by joining BizNews Premium. Register here.If you prefer WhatsApp for updates, sign up to the BizNews channel here..By Maggie Eastland and Ian King.President Donald Trump granted Nvidia Corp. permission to ship its H200 artificial intelligence chip to China in exchange for a 25% surcharge, a move that lets the world’s most valuable company potentially regain billions of dollars in lost business from a key global market.The decision was announced by Trump in a post on his Truth Social network, capping weeks of deliberations with advisers about whether to allow H200 exports to China. Trump said he informed Chinese President Xi Jinping about the move and that Xi had responded favorably. He added that shipments would only go to “approved customers,” and that chipmakers such as Intel Corp. and Advanced Micro Devices Inc. would also be eligible.The move represents a victory for Nvidia in its push to get Trump and Congress to relax export controls that have kept the company from selling its AI chips to the world’s largest semiconductor arena. Chief Executive Officer Jensen Huang has forged a close relationship with Trump since the November 2024 election and has used those ties to make his case that restrictions only boost Chinese domestic champions like Huawei Technologies Co.Trump’s decision provoked an immediate backlash from Democratic senators including Elizabeth Warren, who warned of a “colossal economic and national security failure” in providing Beijing the tools it needs to develop next-generation AI. The H200 is on paper at least a generation ahead of anything offered by Chinese designers from Huawei to Cambricon Technologies Corp. and Moore Threads Technology Co. The country at present also requires more chips than local firms can supply. Still, Beijing — in its quest to wean the nation off American technology — has in the past strongly discouraged Nvidia adoption particularly among state-affiliated corporations and agencies.“We will protect National Security, create American Jobs, and keep America’s lead in AI,” Trump said in his post. “NVIDIA’s U.S. Customers are already moving forward with their incredible, highly advanced Blackwell chips, and soon, Rubin, neither of which are part of this deal,” referring to more advanced lines of Nvidia chips. Bloomberg reported last month that the administration was considering the H200 approvals..Permission for H200 exports is seen as a compromise from Nvidia’s earlier push to sell its more advanced Blackwell-design chips to Chinese customers, a person familiar with the matter said prior to the announcement. Huang had met privately with Trump in Washington last week to discuss export controls, though neither the White House nor the company shared details on their conversation.Payment to the American government would come as a 25% tariff when the chips are shipped from manufacturing sites in Taiwan to the US for inspection by the Commerce Department’s Bureau of Industry and Security as part of a security review, according to a Commerce Department official. The chips would then be shipped to customers in China.Nvidia hailed the decision, saying it will “help to support high-paying jobs and manufacturing in America. Offering H200 to approved commercial customers, vetted by the Department of Commerce, strikes a thoughtful balance that is great for America.” Spokespeople for Intel, AMD and Commerce had no immediate comment. “Ensuring the smooth development of economic, trade, and technological cooperation is in the common interest of both China and the United States. China hopes that the U.S. will take concrete actions to maintain the stability and smooth functioning of global supply chains,” the Chinese embassy in Washington said in an email.Nvidia and AMD shares both gained about 2% in late trading after Trump’s announcement. Intel, which isn’t expected to benefit from the changes in the near term, rose less than 1%. Major Chinese chipmakers Semiconductor Manufacturing International Corp. and Hua Hong Semiconductor Ltd. both fell more than 2% in Hong Kong. .What Bloomberg Economics Says.US approval of exports of Nvidia’s H200 chips to China marks the sharpest pivot yet on US technology and export control policy — and could reshape China’s AI trajectory. The White House decided Monday to allow the chipmaker to sell to China the H200 chip — more powerful than the best chip China can currently legally access — in exchange for the US government receiving 25% of the revenue from each sale. Nvidia’s stock jumped more than 2% after initial reports of the decision and again in after-hours trading after the White House confirmed it. - Michael Deng and Jennifer Welch, analystsClick here for the research.Easing restrictions on the H200 and similar-grade chips risks giving an edge to Chinese companies like DeepSeek that compete with the US in artificial intelligence, said Chris McGuire, a senior fellow for China and emerging technologies at the Council on Foreign Relations. “This is very bad for the export of the full AI stack across the world. It actually undermines it,” said McGuire, who served in the White House National Security Council under President Joe Biden. “At a time when the Chinese are squeezing us as hard as they can over everything, why are we conceding?”After meeting with Trump on Wednesday, Huang had expressed uncertainty about whether China would accept Nvidia’s H200 chips should the US relax restrictions on sales of the processors. “We don’t know. We have no clue,” Huang said, as he headed into a closed-door meeting with members of the Senate Banking Committee, which has jurisdiction over export controls. “We can’t degrade chips that we sell to China — they won’t accept that.”In August, Nvidia won approval to sell its H20 chip to China while AMD was cleared for its MI308 processor — each designed to fall just below export restrictions. Under that arrangement, touted by Trump, the companies would have paid 15% of their China sales to the US government. The payments failed to materialize because regulations were never enacted that would make them legal.The H20 and H200 come from the same generation of Hopper processors, an aging lineup. Nvidia sells the more-advanced Blackwell generation in the US and is preparing to shift to an even speedier family of chips called Rubin.Still, the H200 represents a significant step up from the H20. According to Georgetown University’s Center for Security and Emerging Technology, the H200’s total processing performance is nearly 10 times the limit previously allowed for export to China.Earlier exports to China of the H20 chips were ultimately stymied by authorities in Beijing, who told potential domestic customers to shun the American products and rely instead on processors made by Chinese companies. That effectively blocked Nvidia and AMD from China, the world’s biggest semiconductor market.Trump floated in October, ahead of his summit with Xi, the possibility of offering a scaled-down version of Nvidia’s Blackwell architecture chip to China. That idea failed to come up in his meeting in South Korea with the Chinese leader. Members of Trump’s cabinet, including US Trade Representative Jamieson Greer and Treasury Secretary Scott Bessent, subsequently said they were averse to selling a version of the Blackwell to China at the present moment.Last month, Huang said that China represented a $50 billion market for his company, though for now Nvidia has excluded data center revenue from the Asian nation from its financial forecasts. “We would love the opportunity to be able to reengage the Chinese market,” he said in a Bloomberg Television interview. .Nvidia scored a related lobbying win in Congress last week, when lawmakers kept a provision out of must-pass defense legislation that would have limited the company’s ability to sell its advanced AI chips to China and other adversary nations. The so-called GAIN AI Act would have required chipmakers, including Nvidia and AMD, to give American customers first dibs on their powerful AI chips before selling in China and other arms-embargoed countries.Easing the export restrictions marks a significant shift from policies imposed starting in 2022 to keep Beijing and its military from accessing the most powerful US technologies. Such a move risks provoking sharp opposition from national-security hawks in Washington who have favored export controls as a way to keep adversaries like China from gaining ground in the AI race.The H200, which began shipping to customers last year, is designed to both train and run AI models. The prospect of selling a higher-caliber processor to China bolstered arguments by lawmakers from both parties who have pressed unsuccessfully for the GAIN AI Act’s adoption. Lawmakers are already working on another bipartisan measure known as the SAFE Act that would codify existing US restrictions on exports of advanced semiconductors to the Chinese market.© 2025 Bloomberg L.P.

Trump approves Nvidia H200 AI chip sales to China amid security concerns

Related Stories

BN Daybreak: Bafana Bafana makes history, Phala Phala updates, and the AI chip boom

BN Daybreak: SA rare earth breakthrough; Three politicians killed; Chip stocks tumble

BN Daybreak - Tue 2 June 2026: Trump Agri Tariffs; Nvidia chips; SA grid success; FMD vaccines

Nvidia launches 'superchip' to reinvent Windows PCs - big challenge to Apple, Intel