US President Donald Trump has announced that he will allow AI chip giant Nvidia to sell its advanced H200 chip to “approved customers” in China.
“We will protect our national security, create American jobs, and maintain America's lead in AI,” President Trump said on social media Monday.
The decision, which also applies to other U.S. chip companies such as AMD, came after extensive lobbying by NVIDIA President Jensen Huang, who visited Washington last week to drum up support.
Nvidia, one of the world's largest semiconductor companies and its most valuable company, has found itself at the center of a geopolitical tug-of-war between the United States and China in recent months, having been barred from selling cutting-edge chips to Beijing.
President Trump lifted the ban on chip sales in July, but required Nvidia to pay 15% of its Chinese profits to the U.S. government.
The Chinese government has since reportedly ordered its tech companies to stop purchasing Nvidia chips manufactured for use in the Chinese market.
“We applaud President Trump's decision to allow the U.S. chip industry to compete to support high-wage American jobs and manufacturing,” Nvidia said in a statement provided to BBC News.
Nvidia's H200 is one generation behind the Blackwell chip, which is considered the world's most advanced AI semiconductor.
Huang told the BBC in September that the US needs to “make this technology accessible to people from all over the world, including China.”
He has also repeatedly warned that China, which has cultivated its own chip production ecosystem, lags the United States by a narrow margin in chip development.
Nvidia welcomed President Trump's announcement on Monday.
“Offering the H200 to commercial customers, vetted and approved by the Department of Commerce, is a great balance for the United States,” Nvidia said in a statement.
The company's stock price rose slightly on the news.
President Trump: 25% [sic] Paid to the United States of America,” in the post.
The BBC has contacted the White House for clarification on the deal, but it is likely to face opposition from national security hardliners in Congress.
Alex Capri of the National University of Singapore said the sale of H200 chips to some Chinese customers “buys time” for the United States to negotiate a deal with the Chinese government over rare earths and prevent major disruption to global supply chains.
China has a near monopoly on processing rare earth minerals, which are essential to the production of most electronic devices.
Capri said that while access to the H200 chip is likely to benefit China's technology sector, the Chinese government is still expected to work to reduce its dependence on the United States.
He noted that the Chinese government had previously told local tech companies to reject Nvidia's older H20 chips and encouraged them to buy domestically produced chips.
Researchers at Georgetown University's Center for Security and Emerging Technologies (CSET) said the People's Liberation Army of China is using advanced chips designed by US companies to develop AI-enabled military capabilities.
“Giving China greater access to these high-quality AI chips will allow China to more easily use and deploy AI systems for military applications,” said Cole McFall, senior research analyst at CSET. “They want to utilize advanced chips to gain an advantage on the battlefield.”
