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In a major policy reversal, US President Donald Trump has announced his administration will allow Nvidia to resume exporting its advanced H200 artificial intelligence (AI) chips to “approved customers” in China.
The decision, communicated via a post on the President’s social media platform late Monday, marks a significant departure from the previous Biden administration’s policy and his own earlier stance of restricting China’s access to cutting-edge US semiconductor technology on national security grounds.
Trump Approves H200 Exports to China
In his Truth Social post, Trump said that the exports have been allowed “under conditions that allow for continued strong National Security,” to which he added, “President Xi responded positively!”
The export license covers the Nvidia H200 accelerator, which is the company’s second-most powerful AI chip and a substantial upgrade over the previously restricted, lower-performance H20 variant.
The more advanced, next-generation Blackwell and upcoming Rubin chip families will remain off-limits to Chinese customers, ensuring that America maintains its technological edge.
The deal specifies that exports will only be made to “approved commercial customers,” with the Department of Commerce finalizing the details and vetting process.
The President indicated that this “same approach” is intended to apply to other American chipmakers, including AMD and Intel, potentially establishing a new framework for high-tech US-China commerce.
Nvidia Welcomes Decision
The news is a considerable win for Nvidia, which has been severely constrained in a lucrative market since initial export controls were imposed. CEO Jensen Huang has actively lobbied the administration, arguing that overly strict restrictions merely push China to accelerate its own domestic AI chip development, ultimately undermining the U.S. lead.
In a statement, a spokesperson for Nvidia applauded the move, saying it “strikes a thoughtful balance that is great for America,” supporting high-paying American jobs and manufacturing while balancing security concerns.
Nvidia has been losing its market share, and the company has warned that it is losing its competitive edge in the country where it once had a dominant market share. During the fiscal Q1 2026 earnings call in May, Nvidia CFO Colette Kress said, “Losing access to the China AI accelerator market, which we believe will grow to nearly $50 billion, would have a material adverse impact on our business going forward and benefit our foreign competitors in China and worldwide.”
Democrats Criticize Trump for Approving H200 Exports to China
Trump has framed the move as a strategy to “protect National Security, create American Jobs, and keep America’s lead in AI.” The 25% revenue cut, a highly unconventional financial arrangement, is touted as a benefit to American taxpayers.
However, the decision has drawn swift and sharp criticism from senior Democratic senators. A group of lawmakers condemned the move as a “colossal economic and national security failure,” warning that access to the H200, which is significantly more capable than any domestically produced Chinese chip, could dangerously enhance Beijing’s military and surveillance capabilities.
“Access to these chips would give China’s military transformational technology to make its weapons more lethal, carry out more effective cyberattacks against American businesses and critical infrastructure.” A group of Democratic Senators said in their statement.
The controversy centers on whether the economic benefits and the novel revenue-sharing structure outweigh the risk of strengthening a strategic rival’s AI infrastructure. As the Department of Commerce works to formalize the policy, all eyes remain on the practical details of customer vetting and how the unprecedented 25% fee will be collected.
Military-Civilian Fusion in China
The Chinese Communist Party (CCP) promotes a strategy of Military-Civil Fusion, which seeks to integrate the private sector’s technological innovation, including data and AI capabilities, with the People’s Liberation Army (PLA). This reinforces the government’s interest in accessing corporate data for strategic purposes.
The Chinese government consistently denies that it forces companies to illegally collect or transfer data in violation of laws. Chinese officials typically state that all data collection and transfer are conducted “in accordance with the law” and emphasize that its laws also include provisions to protect data and user privacy, like the PIPL. They view foreign concerns as unfounded accusations aimed at hindering the growth of Chinese businesses.
China Is Backing Its Tech Companies
China, which cracked down on its tech companies, especially Alibaba previously, is now backing its tech companies amid the AI war with the US. In February, Chinese President Xi Jinping met the country’s entrepreneurs, including Alibaba’s co-founder Jack Ma, at a symposium. Ma’s participation in the event with Jinping became all the more important as the Chinese billionaire was the face of China’s crackdown on its tech moguls, whom the Communist Party believed had grown too powerful.
Alibaba is among the Chinese companies that have developed AI chips and even secured a major deal with state-owned telecom company China Unicom to supply artificial intelligence (AI) chips for a new data center. The move underscores Beijing’s accelerating drive for technological self-sufficiency and marks a major victory for domestic chipmakers amid escalating geopolitical tensions and US export restrictions.
Of the nearly 23,000 domestically made AI chips currently powering the initial phase of the data center, Alibaba’s chip unit, T-Head, supplied approximately 72%. The remaining chips were sourced from other Chinese companies, including MetaX, Biren Tech, and Zhonghao Xinying, with plans to procure additional chips from Tecorigin (Wuxi), Moore Threads, and Enflame.
Alibaba Developed New AI Chip
A key feature of Alibaba’s new chip is that it is being manufactured by a Chinese company. This marks a significant departure from the past, where Alibaba’s earlier AI processors were fabricated by Taiwan Semiconductor Manufacturing Company (TSMC), a firm that the US has since restricted from producing cutting-edge AI chips for China. This shift to domestic manufacturing is in direct alignment with China’s broader national strategy to build a homegrown semiconductor ecosystem and lessen its dependence on foreign technology.
China Has Discouraged Domestic Companies From using Nvidia Chips
It remains to be seen whether Nvidia is able to regain its market share in China, as the country has discouraged domestic companies from using its chips over “national security” concerns.
In its fiscal Q3 2026 earnings call last month, Nvidia acknowledged the “increasingly competitive market in China,” where domestic tech giants like Huawei and Alibaba are developing and promoting their own AI chips to challenge Nvidia’s dominance.
Notably, while Nvidia had the permission to export the H20 chip to China, Nvidia’s CFO, Colette Kress, explicitly stated on the call that “sizable purchase orders never materialized in the quarter due to geopolitical issues and the increasingly competitive market in China.”