U.S. Lifts Ban on Advanced AI Chips; China Can Now Use Nvidia H200

In a major policy shift, U.S. President Donald Trump has granted permission for American companies to sell advanced AI chips to China, easing a long-standing challenge for tech firms like Nvidia. The move aims to protect national security while maintaining the U.S.’s lead in artificial intelligence.

Nvidia’s Relief
The decision comes after Nvidia CEO Jensen Huang lobbied in Washington, highlighting the strategic importance of supplying China with the H200 AI chips. This allowance also extends to other U.S. chipmakers, including AMD. Trump emphasized that the policy will safeguard U.S. jobs and ensure that America retains its technological advantage in AI.

Previous Restrictions
Until recently, Nvidia was prohibited from selling its most advanced chips to Beijing. In July, Trump lifted the ban with a condition: Nvidia must remit 15% of revenues from China to the U.S. government. Following this, China initially barred its tech companies from purchasing Nvidia chips.

Strategic Implications
According to reports, Huang warned in September that China is rapidly approaching the U.S. in chip development. Selling H200 chips to China will allow the U.S. additional leverage to negotiate on rare earth minerals and prevent disruptions in global supply chains. Experts note that while China will benefit technologically, Beijing will continue efforts to reduce dependence on American technology.

Market Reaction
The announcement was welcomed by Nvidia, with the company calling it a balanced and strategic step. Nvidia’s shares saw a modest rise following the news. Analysts also note that some domestic Chinese customers may now be encouraged to purchase the chips, providing a controlled approach to semiconductor trade.

Trump’s decision marks a significant shift in U.S.-China tech policy, balancing economic interests, national security, and AI leadership on the global stage.