The United States has approved limited exports of Nvidia’s H200 AI chips to China, but under a newly tightened regulatory framework aimed at protecting U.S. national security and preserving America’s technological edge in artificial intelligence.

Under the new rules, the chips must undergo testing at an independent external laboratory before shipment to verify their AI performance. In addition, Chinese buyers may receive no more than 50% of the total number of H200 chips sold to U.S. customers.

New Requirements for Nvidia and Chinese Buyers

The regulations introduce conditions that did not previously exist. Nvidia must demonstrate that it has sufficient H200 supply within the United States, ensuring domestic demand is not affected. Chinese companies purchasing the chips must prove they have adequate security safeguards in place and formally commit that the chips will not be used for military purposes.

President Donald Trump said last month that he would allow chip sales provided the U.S. government received a 25% fee. The proposal drew criticism from both political parties, with opponents warning that the chips could strengthen China’s military capabilities and undermine U.S. leadership in AI technologies.

A “Compromise” That May Be Hard to Enforce

Jay Goldberg, an analyst at Seaport Research, described the export limits as a compromise solution. While they place some controls on Nvidia’s sales to China, he cautioned that effective monitoring and enforcement could prove difficult.

Goldberg noted that companies have repeatedly found ways to access restricted chips and said the U.S. government’s export strategy appears highly transactional—more like a temporary patch than a coherent long-term policy, masking deeper gaps in U.S. export controls.

Chinese Demand Far Exceeds Supply

According to reports last month, Chinese technology firms have already ordered more than 2 million H200 chips, priced at roughly $27,000 per unit. That figure far exceeds Nvidia’s current availability of about 700,000 chips.

At the CES trade show in Las Vegas last week, Nvidia CEO Jensen Huang said the company is ramping up production of the H200. He added that strong demand from China and other markets is driving up rental prices for H200 chips already operating in cloud data centers.

Warnings About Boosting China’s AI Capabilities

Saif Khan, who served as director for technology and national security at the White House National Security Council during President Joe Biden’s administration, warned that the new rule could significantly accelerate China’s AI programs.

According to Khan, the policy could allow China to acquire around two million advanced AI chips—roughly equivalent to the computing capacity currently held by a typical U.S. AI company. He also cautioned that the administration will face challenges enforcing “know your customer” requirements intended to prevent Chinese cloud providers from supporting illicit activities.

A Shift From the Biden-Era Policy

These concerns led the Biden administration to fully block exports of advanced AI chips to China. The Trump administration, however—guided by White House AI chief David Sacks—believes that controlled sales could actually discourage Chinese competitors, such as Huawei, from accelerating efforts to match cutting-edge chip designs from Nvidia and AMD.

When Trump announced the policy shift last month, he emphasized that exports would proceed “under conditions that preserve strong national security.”

Open Questions on Enforcement and Beijing’s Approval

Major uncertainties remain. It is unclear how strictly the restrictions will be enforced, or whether Beijing will ultimately approve the imports. Past smuggling operations worth $160 million highlight the significant enforcement challenges involved.

Recent reports suggest the U.S. has begun an internal review that could lead to the first shipments of H200 chips to China in the near future, marking an early test of Washington’s revised export strategy amid intensifying global competition over artificial intelligence.

#china , #AI , #NVIDIA , #worldnews , #TRUMP

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