US Approves Restricted Nvidia AI Chip Sales to China

• What happened: The US Commerce Department is allowing Nvidia to sell its H200 AI chips to China under strict conditions.

• Why it matters now: The move signals a major shift in US export policy, balancing economic interests with national security concerns.

• What changes for people: Chinese labs and universities may gain access to advanced AI hardware, while top-tier chips remain restricted.

• Who is affected: Nvidia, Chinese tech companies, AI researchers, and US policymakers.

Washington: In a policy reversal, the US Commerce Department has cleared Nvidia to export its H200 artificial intelligence chips to China, but under controlled conditions. Companies must demonstrate sufficient US supply, and sales of the most advanced Nvidia processors will continue to be blocked.

The decision follows an agreement between US President Donald Trump and Chinese President Xi Jinping in December 2025, allowing exports of H200 chips with the US taking a 25% cut of the sales. This contrasts with restrictions imposed during the Biden administration, aimed at limiting China’s access to advanced AI technology for military purposes.

Chinese regulators have indicated that only select buyers, such as research labs or universities, may import H200 chips. Reports suggest Beijing is encouraging domestic chip alternatives, potentially limiting demand for Nvidia products.

Nvidia CEO Jensen Huang has advocated for the change, emphasizing the importance of global AI systems being built on US technology. The H200 chips, slightly behind Nvidia’s top-tier offerings, are used to train AI models, forming the backbone of innovations like ChatGPT.

While the move opens opportunities for scientific research and education in China, Congressional Democrats have criticized the policy shift, warning it could boost China’s military and economic capabilities.

The agreement highlights the ongoing tech rivalry between the US and China in AI dominance, with Nvidia at the center as the world’s most valuable company due to surging demand for GPUs.