U.S. Approves Nvidia H200 Chip Exports to China - With Strings Attached

The U.S. government has officially approved the export of Nvidia’s H200 artificial intelligence chips to China, marking a major shift in Washington’s approach to advanced semiconductor controls — and sparking renewed debate over national security.

Under new rules announced Tuesday, the Trump administration has cleared sales of Nvidia’s second-most powerful AI chip to Chinese customers, provided they meet a series of strict conditions. The decision is expected to unlock shipments that had been frozen amid intense scrutiny from China hawks in Congress and the national security community.

Before any H200 chips can be shipped, they must be evaluated by a third-party testing lab to verify their AI capabilities. China will also be limited to receiving no more than 50% of the total number of H200 chips sold to U.S. customers.

Nvidia must certify that there is sufficient domestic supply of the chips, while Chinese buyers are required to demonstrate adequate security safeguards and commit to not using the technology for military purposes - conditions that were not previously in place.

Nvidia Applauds the Decision

Nvidia praised the move, saying it strikes a balance between economic competitiveness and national security.

In a statement, the company said the Trump administration’s decision “strikes a thoughtful balance that is great for America” and allows U.S. firms to compete globally while supporting American jobs.

“The administration’s critics are unintentionally promoting the interests of foreign competitors already on U.S. entity lists,” Nvidia added, arguing that the U.S. should prioritize vetted commercial sales rather than ceding ground to rivals.

China also welcomed the development. Liu Pengyu, a spokesperson for the Chinese embassy in Washington, said Beijing supports cooperation that delivers “mutual benefit and win-win results,” while opposing restrictions that disrupt global supply chains.

A Controversial Trade-Off

President Trump previously said the chip sales would be allowed in exchange for a 25% fee paid to the U.S. government - a proposal that immediately drew bipartisan criticism. Opponents argue the H200 could significantly enhance China’s military and accelerate its AI ambitions, potentially eroding America’s technological edge.

Jay Goldberg, an analyst at Seaport Research, described the export caps as a political compromise that may prove difficult to enforce.

“Chinese companies have repeatedly found ways to access restricted chips,” Goldberg said. “This looks more like a temporary Band-Aid than a coherent long-term export strategy.”

Demand in China Is Massive

According to Reuters, Chinese technology firms have already placed orders for more than 2 million H200 chips, each priced at roughly $27,000 — far exceeding Nvidia’s current inventory of about 700,000 units.

At last week’s Consumer Electronics Show in Las Vegas, Nvidia CEO Jensen Huang said the company is ramping up production to meet surging demand from China and other markets. The shortage has also driven up the cost of renting H200 chips from cloud computing providers.

Security Concerns Remain

Former White House national security official Saif Khan warned that the rule could significantly boost China’s AI capabilities.

“The policy would allow roughly 2 million advanced AI chips into China — comparable to the computing power of a top U.S. frontier AI company today,” Khan said. He also cautioned that enforcing customer-verification rules, especially for Chinese cloud providers, would be challenging.

Those concerns had previously led the Biden administration to block sales of advanced AI chips to China altogether. The Trump administration, however, argues that allowing controlled exports could slow the rise of domestic Chinese competitors like Huawei, which remains heavily sanctioned.

When announcing the policy last month, Trump said the chips would be exported “under conditions that allow for continued strong national security.”

Still, questions linger over how strictly the rules will be enforced — and whether Beijing will permit the chips to be sold freely inside China.

Reuters reported last month that the U.S. had already launched a review process that could soon result in the first H200 shipments reaching Chinese customers.