The U.S. is allowing chipmaker Nvidia to sell a more advanced type of chip to China in exchange for the government taking a quarter of the proceeds, President Trump announced Monday.
Nvidia will be allowed to sell its H200 chip, a more advanced model than the one it is currently able to sell to Chinese counterparts under existing export restrictions.
“I have informed President Xi, of China, that the United States will allow NVIDIA to ship its H200 products to approved customers in China, and other Countries, under conditions that allow for continued strong National Security,” Trump said.
“$25% will be paid to the United States of America. This policy will support American Jobs, strengthen U.S. Manufacturing, and benefit American Taxpayers.”
The H200 chip is a generation behind Nvidia’s most cutting-edge chip, the Blackwell chip. Nvidia is not going to be selling the Blackwell chip to China under the terms of the Trump administration’s deal. The company’s next breakthrough chip, Rubin, is also excluded from the export deal.
Nevertheless, Trump’s announcement marks a major win for Nvidia, which has lobbied for months to loosen export controls on its chip sales to China. Nvidia CEO Jensen Huang met with Trump last week to discuss export controls. Trump praised Huang after the meeting and said Huang knew where he stood on export controls.
It remains to be seen whether China will permit the import of Nvidia’s H200 chips. But Trump said in his post that Xi responded positively to the decision.
Semafor first reported Monday the Trump administration’s policy change. Nvidia shares jumped 3 percent during after-hours trading following Trump’s announcement.
“We applaud President Trump’s decision to allow America’s chip industry to compete to support high paying jobs and manufacturing in America,” Nvidia said in a statement.
“Offering H200 to approved commercial customers, vetted by the Department of Commerce, strikes a thoughtful balance that is great for America.”
Trump said the same conditions will apply to AMD, Intel, and other companies. He directed the Department of Commerce to finalize the details of Nvidia’s chip export deal.
Trump previously struck a deal with Nvidia permitting the company to continue selling its less advanced H20 chips to China in exchange for 15 percent of the proceeds. Proponents of the loosened restrictions argue it is important for American firms to gain a greater foothold in the global market to ensure the U.S. leads the world in AI innovation. Nvidia is at the center of the American AI boom because of the essential role its chips play in the function of AI models.
China hawks fear the chip sales will enable intellectual property theft and strengthen China’s national security. Lawmakers on both sides of the aisle have voiced opposition to exporting more powerful AI chips to China.
Exporting the H200 chip to China will grant it access to a better chip than any of its companies can produce domestically, according to a recent report from the Institute for Progress, a pro-innovation think tank. The H200 exports will significantly reduce America’s AI computing advantage over China and do little to substitute for China’s domestic production, the report asserts.
Trump’s announcement is the second victory for Nvidia in the past few days on the issue of export controls. Congressional legislation requiring Nvidia to prioritize American companies in its chip sales failed to make it into the annual must-pass defense policy bill. Nvidia beat out a coalition of China hawks and AI safety advocates in getting the legislation killed.