The United States, under President Donald Trump, has decided to allow the export of Nvidia's H200 processors—its second-most powerful AI chips—to China. This decision marks a significant change in U.S. export control policy concerning advanced semiconductors for artificial intelligence.
The H200 chip, which the Institute for Progress (IFP) estimates is almost six times more powerful than the currently allowed H20 chip, has been approved for sale to vetted commercial customers in China.
The U.S. government will collect a 25% fee on these sales, which Trump stated is intended to protect national security, create American jobs, and maintain the U.S. lead in AI. This fee is an increase from the 15% rate previously proposed in August.
The new approach will also apply to other AI chip firms like Advanced Micro Devices (AMD) and Intel. The move is framed as a compromise: preventing the shipment of the latest, most powerful Blackwell and future Rubin chips to China, while avoiding a total ban that officials believe would strengthen Huawei's domestic AI chip efforts.
The 25% fee will be collected as an import tax from Taiwan (where the chips are manufactured) to the U.S., where the chips will undergo a security review before being exported to China.
Nvidia stated the approval "strikes a thoughtful balance that is great for America," while Intel and AMD did not comment. Nvidia's stock rose 2% in after-hours trading following the announcement.
The decision has drawn criticism from China hawks and Democratic senators, who argue that selling more advanced AI chips will help Beijing supercharge its military and surveillance capabilities. They worry China will eventually reverse-engineer the technology.
Administration officials believe this is a strategic move to manage the technological gap. The latest Blackwell chips are significantly faster than the H200 (1.5x faster for training, 5x-10x for inferencing), ensuring the U.S. retains the technology lead.
Despite the approval, the impact is uncertain as Beijing has cautioned Chinese companies against buying downgraded Nvidia chips and is focusing on domestic alternatives like those from Huawei, Cambricon, and Moore Threads. Some analysts suggest China's "paranoia and pride" might temper demand, even for the superior H200.
The announcement coincides with the Justice Department cracking a China-linked chip smuggling ring that illegally exported controlled H100 and H200 chips, underscoring ongoing enforcement issues.
