The United States will allow Nvidia to export its H200 processors to China. These chips are Nvidia’s second-best artificial intelligence processors. The decision includes a requirement for a 25% fee on each sale. The announcement was made by US President Donald Trump on Tuesday.
The move ends a long debate in Washington. The core question was whether the US should protect its lead in AI chips by withholding sales or maintain influence by allowing controlled exports. However, Beijing had earlier advised companies not to rely on American technology. Because of this, it remains unclear how many new orders will result from the decision.
Market Reaction to the Announcement
Nvidia’s shares increased after the announcement. The stock rose during the day and continued climbing in after-hours trading. The decision was welcomed by investors who had been watching the policy discussion closely.
Trump stated that he had informed China’s President Xi Jinping about the move. According to Trump, the Chinese leader responded positively. He also confirmed that the US Commerce Department was finalising the details of the export process.
Policy Applies to Other AI Chip Firms
The same policy will apply to other AI chip companies, including Advanced Micro Devices and Intel. The 25% fee will be higher than the earlier proposed 15% rate. A White House official confirmed the updated percentage.
The administration described the move as a balance between national security and economic growth. Trump said the decision would protect American jobs and preserve US leadership in artificial intelligence.
He also noted that Nvidia’s US customers were already shifting to the advanced Blackwell chips and the upcoming Rubin chips. These two processors will not fall under the new export arrangement.
Terms of the Export Arrangement
Trump did not specify the quantity of H200 chips approved for export. He also did not outline the final conditions. However, he stressed that shipments would occur under strict security measures.
Administration officials view the decision as a compromise. The alternative option was a complete ban on all US AI chip exports to China. Officials believed such a ban would strengthen Huawei’s efforts to dominate China’s AI chip market. Therefore, limited exports were seen as a more strategic move.
Nvidia said that allowing H200 chips for approved commercial customers created a balanced policy. The company called the approach positive for the United States.
Tax Collection and Security Review Process
The 25% fee on H200 sales will be collected as an import tax. The tax will apply when chips move from Taiwan to the United States. The chips will undergo a security review before they are exported to China. This process aims to prevent any misuse of the technology.
Intel did not comment on the development. The Commerce Department and AMD did not respond to questions.
Reaction From China
China stated that cooperation between both countries was the most productive path forward. The government said it supported mutual benefits in technology trade.
However, there are concerns among US lawmakers. Many believe that advanced AI chips could strengthen China’s military capabilities. These fears led to earlier restrictions on semiconductor exports.
Criticism From US Lawmakers
Several Democratic senators criticised the decision. They called it an economic and national security failure. They warned that China could use US chips to boost its military and industry.
A Republican representative also expressed concern. He said that China would likely copy Nvidia’s technology, produce its own versions, and eventually attempt to weaken Nvidia’s position.
China’s Earlier Stance on Nvidia Chips
In recent months, China discouraged local companies from buying downgraded Nvidia chips. These included the H20, RTX 6000D and L20 models. Those chips were modified to meet US export limits.
However, analysts believe China may soften its position after Trump’s announcement. They expect Beijing to be more open to Nvidia’s presence. The H200 chip offers far better performance than the limited H20 model. Therefore, demand for the stronger processor may increase if policy tensions ease.
Technological Comparison Between H200 and Blackwell Chips
According to available analysis, the H200 chip is significantly more powerful than the H20 model. The H20 is currently the most advanced AI chip that China can buy without restrictions.
The Blackwell chip, which is widely used in the US, is faster than the H200. It offers stronger performance in training artificial intelligence models and in inference tasks. Nvidia’s own research suggests that Blackwell chips can be ten times faster than H200 chips for certain workloads.
China’s Long-Term Goals Remain Unchanged
Analysts believe that China will continue focusing on building its own advanced chip-making capabilities. They expect China to avoid relying completely on US technology. Domestic companies such as Huawei, Cambricon, and Moore Threads are already producing AI chips. These efforts indicate China’s intention to maintain long-term independence in the semiconductor market.
A Temporary Opening in a Larger Strategic Competition
Despite the current easing, experts remain cautious. They indicate that this policy window may not last long. China is expected to continue pushing for self-sufficiency. The United States is likely to adjust export policies as geopolitical conditions evolve.
The decision to allow H200 exports represents a short-term compromise. It aims to maintain technological influence while managing national security risks.
