US approves sale of Nvidia’s advanced H200 chips to China

The US government has given the green light to chip giant Nvidia to sell its advanced artificial intelligence (AI) processors in China, the Commerce Department said on Tuesday.

The H200, Nvidia’s second most advanced semiconductor, was restricted by Washington over concerns that it would give China’s technology industry and military an advantage over the United States.

The Commerce Department said the chips could be sent to China if there is sufficient processor supply in the United States.

President Donald Trump announced last month that he would allow chip sales to “approved customers” in China and charge a 25 percent fee.

Nvidia’s spokesman told the BBC the company welcomed the move and said it would benefit manufacturing and jobs in the US.

The Commerce Department’s Bureau of Industry and Security said the revised export policy applies to Nvidia’s H200 chips as well as its less advanced processors. Chinese customers are also required to demonstrate “adequate security procedures” and cannot use the chips for military purposes.

The H200 chip is a generation behind Nvidia’s Blackwell processor, which is considered the world’s most advanced AI semiconductor and has been blocked from sale in China.

Chinese embassy spokesman Liu Pengyu told the BBC on Wednesday that Beijing has consistently opposed “the politicization and weaponization of technology and trade issues”.

“We oppose blocking and restricting China, which destabilizes industries and supply chains,” he said. “This approach does not serve the common interests of both parties.”

Nvidia is caught in the middle of a geopolitical conflict between the United States and China, the two sides of the global artificial intelligence race.

Trump reversed the chip sales restriction last July but demanded that Nvidia pay some of its profits from China to the US government.

Beijing then reportedly ordered tech companies to boycott Nvidia’s China-bound chips and prioritize domestically produced semiconductors. The move was designed to boost China’s tech industry, but experts consistently say the country’s chips still lag behind those of the United States.

Nvidia CEO Jensen Huang has repeatedly lobbied Washington to allow sales of the company’s high-power chips to China through 2025, arguing that a global market surplus is essential to America’s competitiveness.

But some officials in the United States have expressed concerns that the chips would benefit Beijing’s military and harm America’s progress in artificial intelligence development.

Semiconductor analyst Austin Lyons said Beijing is likely concerned about domestic firms becoming overly reliant on Nvidia, while domestic firms would be willing to secure H200 chips at least until domestic alternatives become better.

Lyons added that Nvidia would be happy to get any revenue from China, even if it came at a lower margin due to the US government cutting sales.

Marc Einstein of Counterpoint Research said Trump’s “unique” offer to cut Nvidia’s sales could also set a precedent for his negotiations on other trade tariffs.

“It will be interesting to see whether this tariff model will expand to other sectors.”