Nvidia (NVDA) Stock Jumps as Trump Administration Begins Review of H200 AI Chip Exports to China

• The Trump administration has launched an inter-agency review of license applications to potentially allow exports of Nvidia’s (NVDA) H200 AI chips to China, with a 25% U.S. government fee, marking a reversal from prior Biden-era bans and Trump’s first-term restrictions.
• Proponents argue that permitting these sales would discourage Chinese firms from accelerating domestic AI chip development, while critics warn it risks eroding U.S. technological superiority and aiding Beijing’s military capabilities.
• Nvidia shares rose 2.29% to $178.13 in early trading amid reports of strong Chinese demand exceeding current H200 production capacity.

The Trump administration has initiated an inter-agency review process that could enable the export of Nvidia (NVDA) H200 artificial intelligence chips to China, marking a potential shift in U.S. policy on advanced semiconductor sales, according to Reuters. The U.S. Commerce Department has forwarded license applications for these sales to the State, Energy, and Defense Departments, which have 30 days to provide input under existing export regulations. Although the review is described as thorough by administration sources, the ultimate authority for approval lies with President Trump.

This development follows Trump’s earlier statement this month committing to permit H200 sales to China while imposing a 25% fee on the U.S. government. Proponents within the administration, including White House AI advisor David Sacks, contend that allowing such exports would reduce incentives for Chinese firms like Huawei to accelerate development of competing technologies, thereby sustaining the lead of U.S. companies in AI hardware. Reports indicate that initial interest from Chinese buyers has already exceeded Nvidia’s current H200 production capacity, prompting considerations for expanded manufacturing of this chip, which serves as the direct predecessor to the flagship Blackwell series.

The H200, though less performant than Blackwell processors in numerous AI workloads, continues to see broad industry adoption and had previously been prohibited from direct sales to China. Trump initially considered authorizing a downgraded Blackwell variant but ultimately focused on the H200. Market reaction reflected optimism, with Nvidia shares advancing 2.29% to $178.13 in early Friday trading.

Critics, including former National Security Council official Chris McGuire, have raised significant objections, asserting that large-scale exports would represent a major strategic error by providing technology critical to China’s AI progress and potentially bolstering its military applications. McGuire has emphasized that the H200 represents a key bottleneck limiting Chinese advancements in artificial intelligence.

This policy direction contrasts with measures under the prior Biden administration, which implemented extensive bans on advanced AI chip exports to China over national security concerns related to potential military diversion or smuggling risks. It also diverges from restrictions during Trump’s first term, which targeted Chinese access to U.S. technology amid allegations of intellectual property theft and dual-use applications – claims denied by Beijing.

A White House spokesperson underscored to Reuters the administration’s focus on maintaining U.S. technological superiority without undermining security considerations. Neither the Commerce Department nor Nvidia has issued public comments on the ongoing review. Unresolved factors include the timeline for approvals and whether Chinese authorities will permit domestic companies to proceed with purchases of these chips.

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