AsianFin -- Reports on Friday showed the Trump administration is internally considering allowing Nvidia Corp. to sell its H200 artificial intelligence (AI) chips to China, marking a potential major shift in U.S. semiconductor export policy that would significantly benefit the world's most valuable company while drawing likely opposition from China hawks in Washington.
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U.S. President Donald Trump's team has held discussions about H200 chip shipments in recent days, according to people familiar with the matter who spoke to Bloomberg. The Commerce Department is reviewing a change to its policy of barring such sales, sources told Reuters. However, no final decision has been made and the discussions could remain internal without resulting in actual license approvals.
Bloomberg sources described the discussions as early internal talks within Trump's team, emphasizing the highly sensitive nature of the deliberations. The sources said the fact that H200 shipments are being considered represents a major departure from the administration's earlier public positions. Reuters sources characterized the situation as the Commerce Department actively reviewing a policy change, stressing that plans could change.
Some within Trump's administration view selling the H200 to China as a compromise, Bloomberg sources said. The processor would be a less extreme move than offering Blackwell chips, which faces widespread opposition from senior staff. However, many officials don't want to see any additional Nvidia chips go to China at all, a view shared by lawmakers on both sides of the aisle.
The White House is currently urging lawmakers to reject such a bill, which represents a bipartisan attempt to safeguard against Trump approving cutting-edge chip sales to China. A bipartisan group of senators is drafting legislation that would force the Commerce Department to deny license applications for all currently restricted chip exports to China, Bloomberg has reported, which would render the H200 discussion moot if enacted.
The White House is currently urging lawmakers to reject such a bill, which represents a bipartisan attempt to safeguard against Trump approving cutting-edge chip sales to China. A bipartisan group of senators is drafting legislation that would force the Commerce Department to deny license applications for all currently restricted chip exports to China, Bloomberg has reported, which would render the H200 discussion moot if enacted.
A White House official declined to comment to Reuters but stated the administration "is committed to securing America's global technology leadership and safeguarding our national security." The U.S. Commerce Department did not respond to requests for comment from either news organization.
Nvidia declined to comment directly on the reported policy review but issued a statement saying current regulations don't allow it to offer a competitive data center product in China, "leaving that massive market to our rapidly growing foreign competitors." The company emphasized that "our foreclosure from the China data center compute market has no impact on our ability to supply customers in the USA."
If realized, the move would represent a substantial easing of U.S. trade restrictions designed to limit China's AI capabilities. The H200 is estimated to be twice as powerful as Nvidia's H20 chip, currently the most advanced AI semiconductor legally exportable to China.
Nvidia shares climbed to a session high on the news Friday, gaining as much as 2% to $184.29 following earlier declines. The Santa Clara, California-based company has repeatedly made this argument this year while lobbying against legislation that would force it to prioritize American customers over Chinese ones.
The development comes as Trump's recent detente with Chinese leader Xi Jinping has boosted prospects for advanced technology exports. It also follows intensive lobbying by Nvidia CEO Jensen Huang, though the proposal would contradict earlier administration stances and Treasury Secretary Scott Bessent's statement just five months ago that Trump's team had "no intent" to increase China's access to advanced semiconductors.
The potential policy shift comes against a backdrop of conflicting signals from the administration. Earlier this year, the U.S. approved shipments of H20 chips to China in exchange for a 15% revenue cut, though several officials claimed this was part of a rare-earth minerals trade deal that roughly a half-dozen people with knowledge of the terms said didn't exist. Commerce Secretary Howard Lutnick justified those exports on grounds they would get China "addicted" to American technology.
Nvidia disclosed on its earnings call Wednesday that H20 sales in China proved "insignificant," totaling just $50 million during the quarter. CFO Colette Kress said "sizable purchase orders never materialized in the quarter due to geopolitical issues and the increasingly competitive market in China." Beijing has discouraged or forbidden firms from using the H20 chip, preferring companies transition to domestic alternatives from manufacturers like Huawei Technologies Co.
Trump had earlier floated discussing exports of Nvidia's most advanced Blackwell chips with Xi, though the topic didn't come up during recent talks. Bessent later said he could imagine exporting Blackwell chips to China once they're no longer the most advanced, possibly in one or two years. Earlier this week, Huang attended a White House event during Saudi Crown Prince Mohammed bin Salman's visit, where Trump described him as a "great guy."
