The Trump administration has formally approved the export of Nvidia's H200 AI chips to China, establishing specific regulatory conditions that mark a significant shift from previous export restrictions. The decision, announced on January 13, puts in place a framework that will likely enable shipments of Nvidia's second most powerful AI chips despite concerns from China hawks in Washington.

Export Conditions and Restrictions

The new regulations establish several key requirements for H200 chip exports to China:

These conditions represent new requirements that had not been established previously under the Biden administration's export restrictions.

Market Demand and Pricing

Chinese technology companies have demonstrated substantial demand for the H200 chips, with significant order volumes already placed:

At the Consumer Electronics Show in Las Vegas, Nvidia CEO Jensen Huang indicated the company was ramping up H200 production amid strong global demand, which has been driving up rental prices for H200 chips in cloud computing data centers.

Policy Shift and Strategic Rationale

The approval represents a reversal from the Biden administration's policy that barred sales of advanced AI chips to China. US President Donald Trump announced the decision would include a 25% fee for the US government. The Trump administration, led by White House AI czar David Sacks, argues that shipping advanced AI chips to China under controlled conditions may discourage Chinese competitors, including heavily sanctioned Huawei, from intensifying efforts to develop competing chip designs.

Industry and Expert Analysis

Jay Goldberg, an equities analyst with Seaport Research, characterized the export caps as a compromise that imposes some restrictions on Nvidia's China sales but may prove difficult to enforce. Goldberg noted that Chinese companies have previously found ways to access restricted chips, describing the approach as "highly transactional."

Saif Khan, who served as director of technology and national security on the White House National Security Council under the Biden administration, expressed concerns that the rule would substantially boost China's AI capabilities. Khan noted that allowing approximately two million advanced AI chips to China equals the compute capacity owned by a typical US frontier AI company, while highlighting potential enforcement challenges regarding know-your-customer requirements for Chinese cloud providers.

The US Commerce Department has introduced new regulatory requirements governing Nvidia's distribution of H200 chips, establishing both domestic supply obligations and international export limitations. The announcement represents a significant development in semiconductor trade policy affecting one of the industry's leading GPU manufacturers.

New Certification Requirements

Under the updated regulations, Nvidia must provide formal certification demonstrating sufficient H200 supply availability in the US market. This requirement ensures domestic market access to the advanced semiconductor technology before international distribution.

Export Volume Restrictions

The Commerce Department has implemented specific limitations on China-bound shipments of H200 chips. The new framework caps exports to China at a maximum of 50% of the volumes allocated to the US market.

Regulatory Framework

The new measures establish a structured approach to advanced semiconductor distribution, balancing domestic supply security with international trade considerations. The certification process requires Nvidia to demonstrate adequate US market supply before proceeding with international shipments.

These regulations reflect ongoing efforts to manage the distribution of advanced semiconductor technology while maintaining domestic market priorities. The 50% volume cap creates a direct relationship between US supply levels and export permissions for China-bound shipments.