The decision appears to settle a US debate about whether Nvidia and rivals should maintain their global lead in AI chips by selling to China or withhold the exports, though Beijing has told companies not to use US technology, leaving it unclear whether Trump’s decision would lead to new sales.
Nvidia shares rose 2pc in after-hours trading after Trump made the announcement on Truth Social, following a 3pc rise during the day on a report by Semafor.
Trump said in his post that he had informed President Xi Jinping of China, where Nvidia’s chips are under government scrutiny, about the move and that he “responded positively.”
He said the US Commerce Department was finalising details of the arrangement and the same approach would apply to other AI chip firms such as Advanced Micro Devices and Intel.
Trump’s post said the fee to be paid to the US government was “$25 per cent”, and a White House official confirmed he meant 25 per cent, higher than the 15 per cent proposed in August.
“We will protect national security, create American jobs, and keep America’s lead in AI,” Trump wrote on Truth Social.
“Nvidia’s US customers are already moving forward with their incredible, highly advanced Blackwell chips, and soon, Rubin, neither of which are part of this deal.”
Trump did not say how many H200 chips would be authorised for shipment or what conditions might apply, only that exports would occur “under conditions that allow for continued strong national security.”
Administration officials consider the move a compromise between sending Nvidia’s latest Blackwell chips to China, which Trump has declined to allow, and sending China no US chips at all, which officials believe would bolster Huawei’s efforts to sell AI chips in China, a person familiar with the matter said.
“Offering H200 to approved commercial customers, vetted by the Department of Commerce, strikes a thoughtful balance that is great for America,” Nvidia said in a statement.
Intel declined to comment. The US Commerce Department, which oversees export controls, and AMD did not respond to requests for comment.
A White House official said that the 25pc fee would be collected as an import tax from Taiwan, where the chips are made, to the United States, where the chips will undergo a security review by US officials before being exported to China.
Asked about the approval on Tuesday, the Chinese foreign ministry said that China believes it should cooperate with the US to achieve mutual benefits.
Fears of chips strengthening China’s military
China hawks in Washington are concerned that selling more advanced AI chips to China could help Beijing supercharge its military, fears that had first prompted limits on such exports by the Biden administration.
The Trump administration had been considering greenlighting the sale, sources told Reuters last month.
Trump said last week he met with Nvidia CEO Jensen Huang and that the executive was aware of where he stood on export controls.
“It’s a terrible mistake to trade off national security for advantages in trade,” said Eric Hirschhorn, who was a senior Commerce Department official during the Obama administration.
“It cuts against the consistent policies of Democratic and Republican administrations alike not to assist China’s military modernisation.”
According to a report released on Sunday by the non-partisan think tank, the Institute for Progress (IFP), the H200 would be almost six times as powerful as the H20, the most advanced AI semiconductor that can legally be exported to China, after the Trump administration reversed its short-lived ban on such sales this year.
The Blackwell chip now in use by US AI firms is about 1.5 times faster than H200 chips for training AI systems, the IFP said, and five times faster for inferencing work where AI models are put to use. Nvidia’s own research has suggested Blackwell chips are 10 times faster than H200 chips for some tasks.
Several Democratic US senators in a statement described Trump’s decision as a “colossal economic and national security failure” that would be a boon to China’s industry and military.
Republican Representative John Moolenaar, who chairs the House China Select Committee, said in a statement to Reuters that China would use the chips to strengthen its military capabilities and surveillance.
“Nvidia should be under no illusions – China will rip off its technology, mass-produce it themselves and seek to end Nvidia as a competitor,” he said.
In recent months, Beijing has cautioned Chinese tech companies against buying chips that Nvidia downgraded to sell to the Chinese market, which are the H20, RTX 6000D and L20, two sources said.
George Chen, partner at consultancy The Asia Group, said he expected Chinese regulators to soften their hardline approach to Nvidia following Trump’s comments on Xi’s reaction, given efforts to improve US–China relations. The H200 was also far more useful to China than the H20, he said.
“I expect state media to gradually change their narrative and be more welcoming to Nvidia,” he said.
Bo Zhengyuan, political analyst at consultancy firm Plenum, said he also believed that Beijing would be more cautious about intervening.
“But on a longer horizon, we don’t know how long this window can last. China will not be disturbed by this easing, and it will remain ultra-focused on gaining advanced chip-making capability of its own,” he said.
China’s domestic AI chip companies now include tech giant Huawei Technologies as well as smaller players such as Cambricon and Moore Threads.
