U.S. President Donald Trump has authorized Nvidia Corp. to export its H200 artificial intelligence (AI) chips to China under a 25% surcharge arrangement, potentially restoring billions in lost revenue for the world's most valuable company while marking a significant shift in semiconductor export policy, according to a social media post on Monday.
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Trump announced the decision on his Truth Social platform, stating he had informed Chinese President Xi Jinping of the move and received a positive response. The chips will only be shipped to "approved customers" vetted by the Commerce Department. The arrangement extends to other American chipmakers including Intel Corp. and Advanced Micro Devices Inc. (AMD).
Nvidia shares rose more than 2% in after-hours trading following the announcement. The company praised the decision as striking "a thoughtful balance that is great for America" and supporting high-paying American jobs.
The policy shift risks provoking opposition from national security hawks in Washington who have favored strict export controls to prevent China from advancing in the AI race. Senator Elizabeth Warren warned the move "risks turbocharging China's bid for technological and military dominance."
Revenue-Sharing Model Takes Shape
The 25% payment will be collected as a tariff when chips are shipped from manufacturing sites in Taiwan to the U.S. for inspection by the Commerce Department's Bureau of Industry and Security (BIS), according to a Commerce Department official. The chips would then be shipped to customers in China.
This arrangement represents an increase from an earlier agreement announced in August, when Nvidia and AMD secured approval to sell H20 chips and MI308 processors to China with a 15% revenue-sharing requirement. Those payments never materialized because implementing regulations were never enacted. Trump stated the same 25% approach would apply to AMD, Intel, and other American companies.
From Consideration to Approval
Bloomberg reported last month that the Trump administration was considering H200 export approvals. The decision followed weeks of deliberations and came after Nvidia CEO Jensen Huang met privately with Trump in Washington last week to discuss export controls.
The H200 approval is viewed as a compromise from Nvidia's earlier push to sell more advanced Blackwell-design chips to Chinese customers, Bloomberg cited a person familiar with the matter prior to the annoucement. Trump emphasized in his post that Nvidia's U.S. customers are already moving forward with the more advanced Blackwell chips and next-generation Rubin chips, neither of which are part of this deal.
H200 Represents Significant Capability Upgrade
The H200 and H20 come from the same generation of Hopper processors, an aging lineup compared to Nvidia's current offerings. However, the H200 represents a substantial step up from the H20. According to Georgetown University's Center for Security and Emerging Technology, the H200's total processing performance is nearly 10 times the limit previously allowed for export to China.
The H200, which began shipping to customers last year, is designed to both train and run AI models. 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 sells the more-advanced Blackwell generation in the U.S. and is preparing to shift to the Rubin family of chips.
Market Access Remains Uncertain
Earlier H20 chip exports to China were ultimately blocked by Beijing authorities, who instructed domestic customers to rely on processors made by Chinese companies like Huawei Technologies Co. instead of American products. This effectively shut Nvidia and AMD out of the world's biggest semiconductor market.
After meeting with Trump last week, Huang expressed uncertainty about Chinese acceptance of H200 chips. "We don't know. We have no clue," Huang said before a closed-door meeting with Senate Banking Committee members. "We can't degrade chips that we sell to China — they won't accept that."
Huang stated last month that China represented a $50 billion market for Nvidia, though the company has excluded datacenter revenue from China in its financial forecasts. Nvidia disclosed on its recent earnings call last month that H20 sales in China totaled just $50 million during its third fiscal quarter, with Chief Financial Officer (CFO) Colette Kress citing "geopolitical issues and the increasingly competitive market in China.
Policy Shift Draws Mixed Reactions
Trump’s decision to ease restrictions marks a departure from policies imposed starting in 2022 to restrict Beijing's access to powerful U.S. technologies.
Chris McGuire, a senior fellow at the Council on Foreign Relations who served in the White House National Security Council under President Joe Biden, criticized the move: "At a time when the Chinese are squeezing us as hard as they can over everything, why are we conceding?"
Nvidia scored a related lobbying victory last week when lawmakers excluded from defense legislation the GAIN AI Act, which would have required chipmakers to prioritize American customers before selling powerful AI chips to China and other adversary nations. Lawmakers are working on another bipartisan measure, the SAFE Act, that would codify existing restrictions on advanced semiconductor exports to China.
