Ask Onix
US eases restrictions on Nvidia AI processors for China
The US Commerce Department announced Tuesday that Nvidia may resume shipping its advanced H200 AI chips to China, reversing earlier bans aimed at limiting Beijing's technological and military advancements.
Conditions for export approval
Authorities will permit sales only if domestic US supply remains sufficient. Chinese buyers must also implement robust security protocols and pledge not to deploy the chips for military purposes, according to the Bureau of Industry and Security.
Political and economic motivations
Former President Donald Trump revealed last month that he would permit sales to "approved customers" in China-provided Nvidia pays a 25% fee on each transaction. The policy shift follows months of lobbying by Nvidia CEO Jensen Huang, who argued that global market access is vital for maintaining US competitiveness in AI.
"This decision supports American manufacturing and jobs,"
Nvidia spokesperson
China's response and industry impact
Beijing has long opposed US export controls, calling them a politicization of trade. Chinese Embassy spokesman Liu Pengyu reiterated Wednesday that such restrictions "disrupt supply chain stability and harm mutual interests."
Despite tensions, Chinese tech firms are expected to seek the H200 chips-currently the second-most advanced in Nvidia's lineup-until domestic alternatives improve. Analyst Austin Lyons noted that while Beijing aims to reduce reliance on foreign semiconductors, local alternatives still lag behind US technology.
Geopolitical tensions persist
Nvidia remains at the center of US-China tech rivalry. Washington continues to block sales of Nvidia's most advanced Blackwell processors to China, citing national security risks. Meanwhile, Trump's proposed 25% fee on Nvidia's China sales could set a precedent for future trade negotiations, according to Counterpoint Research's Marc Einstein.
For Nvidia, the policy shift offers a financial lifeline, even if margins shrink due to the US government's cut. The company's stock and supply chain operations are likely to benefit from restored access to the Chinese market.
