In a significant policy shift, the U.S. government has formally approved NVIDIA to export its H200 AI chip to China, but with a key condition: a 25% fee on sales revenue must be paid. This decision marks a potential breakthrough for NVIDIA to recover billions in lost business from the crucial Chinese market, following weeks of intense lobbying and negotiation.
The approval is seen as a compromise. While NVIDIA successfully advocated for the H200, its more advanced Blackwell and upcoming Rubin chips remain under export restriction. U.S. officials emphasized that exports are strictly for "approved customers" and that the policy framework also applies to other U.S. chipmakers like Intel and AMD. This move represents the most notable relaxation of the stringent export controls first implemented in late 2022.
Despite the regulatory win, market acceptance is not guaranteed. NVIDIA CEO Jensen Huang admitted uncertainty about whether Chinese clients would accept the H200 under these new terms, stating the company cannot offer a degraded version for the market. The Chinese AI chip market is estimated to be worth tens of billions of dollars, and NVIDIA has notably excluded revenue from its Chinese data center business from recent financial forecasts due to the previous restrictions.
The decision has already sparked strong opposition from lawmakers who support strict tech containment. Critics, including prominent Democratic Senator Elizabeth Warren, argue that allowing these exports will "greatly enhance China's capabilities and undermine U.S. tech leadership." This policy reversal is expected to intensify efforts to pass stricter legislation, such as the proposed GAIN AI Act, which seeks to prioritize U.S. customer access to advanced chips.
ICgoodFind's Insight
The conditional approval of H200 exports is a pivotal, yet unstable, development in the U.S.-China tech rivalry. It creates a new, revenue-sharing model for controlled tech trade but sets the stage for continued political and commercial friction over the future of high-end semiconductor exports.
