US approves sale of Nvidia's advanced H200 chips to China

The US government has given chip giant Nvidia the green light to sell its advanced artificial intelligence (AI) processors in China, the Department of Commerce said on Tuesday.

The H200, Nvidia's second-most-advanced semiconductor, had been restricted by Washington over concerns that it would give China's technology industry and military an edge over the US.

The Commerce Department said the chips can be shipped to China granted that there is sufficient supply of the processors in the US.

President Donald Trump said last month that he would allow the chip sales to "approved customers" in China and collect a 25% fee.

Throughout 2025, Nvidia CEO Jensen Huang continually lobbied Washington to allow the sale of the firm's high-powered chips to China, arguing that global market excess is essential for America's competitiveness.

Some officials in the US, however, have expressed concerns that the chips would benefit Beijing's military and hurt America's progress in AI development.

While Beijing is likely concerned about domestic firms becoming over-reliant on Nvidia, local firms will be eager to secure H200 chips - at least until homegrown alternatives get better, said semiconductor analyst Austin Lyons.

Nvidia will also be happy to get any revenue from China, even if it comes at a lower margin due to the US government taking a cut of the sales, Lyons added.

Trump's "unique" proposal to collect a cut of Nvidia's sales could also set a precedent for his negotiations in other trade tariffs, said Marc Einstein from Counterpoint Research.

"It will be interesting to see if this tariff model expands to other sectors."