US approves Nvidia H200 chip exports to China with some conditions

The Trump administration on Tuesday (January 13) gave a formal green light to China-bound sales of Nvidia's NVDA.O second most powerful AI chips, putting in place a rule that will likely kickstart shipments of the H200 despite deep concerns among China hawks in Washington.

According to the regulations, the chips will be reviewed by a third-party testing lab to confirm their technical AI capabilities before they can be shipped to China, which cannot receive more than 50% of the total amount of chips sold to American customers.

Nvidia will need to certify there are enough H200s in the U.S., while Chinese customers must demonstrate "sufficient security procedures" and cannot use the chips for military purposes. Those conditions had not been established previously.

U.S. President Donald Trump announced last month that he would allow the chip sales in exchange for a 25% fee for the U.S. government. The decision drew fire from China hawks across the U.S. political spectrum over concerns the chips would supercharge Beijing's military and erode the U.S. advantage in artificial intelligence.

Chinese technology companies have placed orders for more than 2 million H200 chips that are priced at around $27,000 each, Reuters reported last month, exceeding Nvidia's inventory of 700,000 of the chips.

At the Consumer Electronics Show last week in Las Vegas, Nvidia CEO Jensen Huang said the company was ramping up production of H200 chips amid strong demand both from China and the rest of the world that was driving up the price to rent the H200 chips currently sitting in cloud computing data centers.

Production: Kyoko Gasha/Reuters