The US government has approved the sale of Nvidia’s H200 AI chips to 10 Chinese companies, marking a rare exception to its broader restrictions on advanced semiconductor exports to China. Nvidia CEO Jensen Huang is pursuing regulatory breakthroughs to maintain access to the lucrative Chinese market, which accounted for nearly a quarter of the company’s revenue in fiscal year 2025 1.
Nvidia’s H200 chip, designed for high-performance AI workloads, is among the advanced semiconductors subject to US export controls aimed at limiting China’s access to cutting-edge technology. The Biden administration introduced these restrictions in October 2022 to curb China’s military and AI advancements, forcing Nvidia to develop modified versions of its chips, such as the A800 and H800, to comply with the rules. The approval for H200 sales suggests a potential easing of these curbs for specific buyers, though the US has not disclosed the identities of the 10 Chinese firms involved 1.
Jensen Huang, Nvidia’s co-founder and CEO, has been vocal about the importance of the Chinese market, which contributed approximately 23% of the company’s $60.9 billion revenue in fiscal year 2025. During a recent earnings call, Huang emphasized the need for a regulatory breakthrough to navigate the US-China tech rivalry, stating, "We are working closely with the US government to find a path forward that balances national security concerns with the economic realities of the global semiconductor industry" 1. Some analysts view the approval for H200 sales as a rare exception, not a broad policy shift.
The H200 chip, unveiled in November 2023, is a successor to Nvidia’s H100 and is optimized for generative AI and large language models. It offers up to 141GB of HBM3e memory and delivers 4.8 terabytes per second of memory bandwidth, making it one of the most powerful AI chips available. The US government’s decision to allow its sale to Chinese firms could provide Nvidia with a competitive edge in China, where domestic alternatives like Huawei’s Ascend 910B are gaining traction amid the export restrictions 1.
China has been investing heavily in developing its own semiconductor industry to reduce reliance on US technology. The US export controls have accelerated these efforts, with Chinese firms like Huawei and SMIC making strides in producing advanced chips. However, industry experts note that China still lags behind the US and Taiwan in semiconductor manufacturing capabilities. The approval for H200 sales could temporarily alleviate pressure on Chinese AI firms, which have struggled to access high-end chips for training large language models 1.
The US government’s decision has drawn mixed reactions from lawmakers and industry stakeholders. Some US lawmakers have expressed concerns that easing restrictions could undermine national security, arguing that advanced AI chips could be diverted for military use. Senator Marco Rubio, a vocal critic of China’s tech ambitions, stated, "Allowing Nvidia to sell its most advanced chips to China is a dangerous precedent that could strengthen Beijing’s military capabilities" 1. Conversely, industry groups like the Semiconductor Industry Association have urged the US to adopt a more nuanced approach, balancing security concerns with the need to maintain global competitiveness.
Nvidia’s stock price reacted positively to the news, rising by 3.2% in after-hours trading following the announcement. The company’s shares have surged by over 200% in the past year, driven by strong demand for its AI chips from cloud providers and enterprises. However, the ongoing US-China tech rivalry remains a significant risk factor for Nvidia, which has seen its revenue from China decline by 12% year-over-year in the first quarter of fiscal year 2025 due to export restrictions 1.
The approval for H200 sales comes amid broader geopolitical tensions between the US and China, including tariffs on Chinese goods and restrictions on US investments in Chinese tech firms. The Biden administration has framed its tech policies as a way to protect national security, while China has accused the US of engaging in "tech hegemony." The context of this approval has been noted alongside ongoing diplomatic engagements between the two countries 1.