The United States will allow Nvidia’s H200 processors its second-most advanced artificial intelligence chips to be exported to China while collecting a 25% fee on the sales, President Donald Trump announced Monday.
The move ends months of debate in Washington over whether US chipmakers should preserve their global lead by selling to China or restrict exports to limit Beijing’s military and technological rise. It remains unclear whether the decision will spark new demand, however, as China has advised domestic firms to avoid US technology.
Nvidia’s shares rose 2% in after-hours trading following Trump’s statement on Truth Social, after climbing 3% earlier in the day on a Semafor report. Trump said he informed Chinese President Xi Jinping of the decision and received a “positive” response.
The US Commerce Department, he added, is finalizing conditions for the exports, which will apply to other chipmakers including AMD and Intel. A White House official confirmed that the 25% fee would be charged as an import tax when the chips enter the US from Taiwan for security screening before re-export to China.
Trump emphasized that the arrangement will “protect national security, create American jobs, and keep America’s lead in AI,” noting that Nvidia’s newest Blackwell and upcoming Rubin chips are not part of the deal.
Administration officials consider the move a middle-ground solution: refusing to send China any US chips could boost Huawei’s domestic AI chip ambitions, while sending the most advanced Blackwell chips was ruled out. Nvidia welcomed the decision as a “thoughtful balance.”
Critics in Washington, however, warn the chips could strengthen China’s military. Several Democratic senators called the approval a “colossal national security failure,” while Republican Congressman John Moolenaar said China would “rip off” Nvidia’s technology and mass-produce it.
A report by the Institute for Progress said Nvidia’s H200 chip is nearly six times more powerful than the H20 the most advanced AI processor currently allowed for export to China. Nvidia’s Blackwell chips, already used by major US AI labs, are even faster.
Despite the approval, China has been intensifying efforts to cut reliance on Nvidia. Regulators recently accused Nvidia’s downgraded H20 chips of potential security backdoors a claim the company denies and have warned local firms against relying on US semiconductors.
“Chinese firms want H200s, but the Chinese state is driven by paranoia and pride,” said Craig Singleton of the Foundation for Defense of Democracies. “Washington may approve the chips, but Beijing still has to let them in.”
The announcement came the same day the US Justice Department revealed it had cracked a China-linked smuggling ring accused of illegally exporting at least $160 million worth of Nvidia’s restricted H100 and H200 chips in late 2024 and early 2025.
Experts say Chinese companies may still buy H200s because they outperform any chips produced domestically. China’s local AI chipmakers include Huawei, Cambricon and Moore Threads, though none match Nvidia’s performance yet.
Chinese semiconductor indices dipped at Tuesday’s market open but later regained most losses amid investor uncertainty over Beijing’s stance on the US approval.
Erizia Rubyjeana
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