The US government has approved the sale of Nvidia’s H200 AI graphics chip systems to China, with certain stipulations.
“I have informed President Xi, of China, that the United States will allow NVIDIA to ship its H200 products to approved customers in China, and other Countries, under conditions that allow for continued strong National Security,” President Trump wrote on Truth Social.
According to Trump, the US will get a 25% cut of sales to “support American Jobs, strengthen U.S. Manufacturing, and benefit American Taxpayers,” according to Trump, who notes that Nvidia’s Blackwell and Rubin chips are not part of the deal.
Nvidia’s H200 GPU stack (Credit: Nvidia)
“The Department of Commerce is finalizing the details, and the same approach will apply to AMD, Intel, and other GREAT American Companies,” Trump added.
In August, AMD and Nvidia agreed to give the US a 15% revenue slice of the companies’ AI chip sales to China. A few weeks later, the US took a 10% stake in Intel.
Chinese access to high-end GPUs, AI accelerators, and chip fabrication machines has been a key sticking point in trade negotiations between the US and China. On-again, off-again tariffs have made the situation inconsistent at best and led to an increase in smuggling operations.
The H200 is based on Nvidia’s previous-generation Hopper design, which is built on a 4nm process node and has access to 141GB of HBM3E memory. CEO Jensen Huang might have joked that no one would give Hopper away once Blackwell comes out, but the H200 is still much faster than Chinese-produced hardware—as much as double the speed, according to TechPowerUp—and provides intimate access to the CUDA ecosystem, which in turn gives access to Nvidia’s AI design and development tools.
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That said, Chinese authorities have encouraged Chinese companies to utilize domestic suppliers for their chips, with a government mandate to use at least 50% for inferencing workloads. In July, the Cyberspace Administration of China also flagged Nvidia’s less-powerful H20 AI GPU as a potential spying risk, after Nvidia secured White House approval to sell that product in China.
However, when China previously attempted to force DeekSeek developers to use Huawei hardware for training instead of Nvidia GPUs, they ultimately reverted to Nvidia hardware because the results weren’t positive, the Financial Times reported in August.
As much as China would like to strengthen its own supply chain and compete directly with US firms, it’s not there yet. For now, Nvidia GPUs like Blackwell and even last-generation H200 Hopper designs are the best available for GPU training, and in many cases, inferencing too. We’ll have to see how interested Beijing is in buying these chips, but Nvidia will no doubt make plenty of money from the deal, even if it’s giving 25% of revenue to the US government.
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‘Haphazard and Transactional Approach’
In a statement, Sen. Mark R. Warner, Vice Chairman of the Senate Select Committee on Intelligence, argued that the Trump administration has “no strategic vision” for AI competition.
“Unfortunately, the Trump administration’s haphazard and transactional approach to export policy demonstrates that it does not have any sort of coherent strategy for how we will compete with China, specifically as it relates to whose chips, tools, cloud infrastructure, and ecosystem will influence the most AI developers worldwide,” said Sen. Warner, a Virginia Democrat.
Warner’s Republican counterpart on the committee, Sen. Tom Cotton of Arkansas, recently signed on to bipartisan legislation that would codify the ban on selling AI chips to China into law.
“It’s crucial that we protect American AI innovation from Communist China to win the AI race,” Sen. Cotton said last week. The Secure and Feasible Exports (SAFE) of Chips Act “will codify current administration policy and keep our most advanced technology out of the hands of America’s adversaries.”
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Jon Martindale is a tech journalist from the UK, with 20 years of experience covering all manner of PC components and associated gadgets. He’s written for a range of publications, including ExtremeTech, Digital Trends, Forbes, U.S. News & World Report, and Lifewire, among others. When not writing, he’s a big board gamer and reader, with a particular habit of speed-reading through long manga sagas.
Jon covers the latest PC components, as well as how-to guides on everything from how to take a screenshot to how to set up your cryptocurrency wallet. He particularly enjoys the battles between the top tech giants in CPUs and GPUs, and tries his best not to take sides.
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