The US Department of Commerce has approved the export of Nvidia’s H200 artificial intelligence chips to China for vetted commercial customers, reversing earlier restrictions and allowing sales under a licensing framework in which the US government will receive a share of the revenue.
Conditions Attached to the Export Approval
The decision allows Nvidia to ship H200 chips to approved customers in China, according to reporting from Semafor. CNBC reported that the US will take a 25% cut of the revenue generated from these sales.
The H200 is significantly more advanced than the H20 chip that Nvidia previously designed specifically to comply with China export restrictions. Under the current approval, Nvidia will only be permitted to ship H200 chips that are approximately 18 months old.
An Nvidia spokesperson said the company welcomed the decision, stating that the approval allows US chip manufacturers to remain competitive while supporting domestic jobs and manufacturing. The spokesperson said shipments would be limited to commercial customers vetted by the Department of Commerce.
Role of the Trump Administration
The approval follows comments made a week earlier by US Commerce Secretary Howard Lutnick, who said that the decision on whether to allow H200 exports to China rested with President Donald Trump.
On Monday, Trump said in a Truth Social post that Chinese president Xi Jinping had “responded positively” to the decision to allow the exports.
Congressional Opposition and Proposed Legislation
The move conflicts with concerns raised by members of Congress from both major political parties over the national security implications of selling advanced AI chips to China.
On Dec 4, Republican Senator Pete Ricketts of Nebraska and Democratic Senator Chris Coons of Delaware introduced the Secure and Feasible Exports Act, or SAFE Chips Act. The bill would require the Department of Commerce to deny export licenses for advanced AI chips to China for 30 months.
It remains unclear when the proposed legislation will come up for a vote, particularly in light of the administration’s decision to permit shipments of the H200.
Shifting US Policy on Advanced Chip Exports
The Trump administration imposed new licensing requirements on chipmakers including Nvidia in April. In May, it formally rescinded a Biden-era diffusion rule that would have regulated the export of AI chips.
During the summer, the US government signaled it would allow chip exports to China provided the government received a 15% share of the revenue, positioning advanced chips as part of broader trade negotiations.
By that stage, demand for US-developed chips in China had already been disrupted.
China’s Earlier Restrictions on Nvidia Products
In September, China’s Cyberspace Administration of China banned domestic companies from purchasing Nvidia’s chips. The decision left Chinese firms relying on less advanced domestic alternatives from companies such as Alibaba and Huawei.
Featured image credits: Flickr
For more stories like it, click the +Follow button at the top of this page to follow us.