US President Donald Trump on Monday announced that Nvidia will be allowed to sell its powerful H200 chips to China — as first reported by Semafor — in exchange for a 25% surcharge, a move that will open up a huge market for the chipmaker while ensuring US technology remains the standard worldwide.
Nvidia will be given permission to ship the advanced chips to “approved customers” in China and other countries, Trump said in a social media post, and added that other US chipmakers are also eligible.
The move seeks to find a middle ground between those who oppose exports of any advanced AI chips and those who worry that restrictions will merely hand the market to Chinese competitors. It also aims to satisfy the Chinese government, which has blocked imports of less powerful chips, such as Nvidia’s H20.
The US enacted strict export restrictions under the Biden Administration in an effort to prevent China from catching up on AI. But some in the White House believe those restrictions have more or less failed, according to people familiar with their thinking.
Despite the restrictions, Chinese companies like DeepSeek and Alibaba have produced world class AI models and companies like Huawei have made rapid progress in producing hardware to fill the void left by the export restrictions.
Proponents of the restrictions argue that they served to slow China and give US companies a head start on gaining global market share during a critical period.
In the meantime, the US has struggled to revamp its domestic chip manufacturing supply to counter over-reliance on Taiwan Semiconductor Manufacturing Company, or TSMC, and China has exerted leverage over the US with its stranglehold on rare earth minerals needed for batteries and other critical technologies.
