NVIDIA H200 AI Chip Exports To China Finally Approved But With New Terms
In a post on Truth Social, U.S. President Donald Trump confirmed the administration has finally given NVIDIA approval to begin shipping Hopper H200 AI chips to China, though at a higher royalty rate that previously agreed to. Instead of forking over 15% of AI chip sale revenue to the U.S. government, NVIDIA will pay a 25% rate to "support American jobs, strengthen U.S. manufacturing, and benefit American taxpayers."
Trump also confirmed that silicon based on NVIDIA's latest generation Blackwell architecture are not part of the deal and still banned from being exported to China.
This has been an ongoing saga with no shortage of twists and turns. It started in earnest back in August when the Trump administration reportedly struck a deal to green light exports of NVIDIA's data center chips based on Hopper and AMD's Instinct MI308 accelerators to China, with both American firms agreeing to pay the U.S. government 15% of all revenues.
While the rate is significant, and even more so now that it's been bumped up to 25%, there are billions of dollars at stake. Prior to the export ban, it was estimated that NVIDIA could have sold in the neighborhood of 1.5 million H200 chips worth around $23 billion to China this year. Instead, NVIDIA CEO Jensen Huang has gone on record saying NVIDIA's market share in China is "essentially zero." Part of why this is notable is because the vast majority of NVIDIA's earnings these days come from data center products—over $51 billion last quarter, compared to around $4.3 billion in gaming revenue.
Huang has also warned that it's vital for the U.S. to remain competitive in the AI chip race, which includes "winning developers worldwide." And from his vantage point, export restrictions run counterproductive to those goals, and that "China is nanoseconds behind America in AI."
"Export restrictions spurred China’s innovation. The U.S. has based its policy on the assumption that China cannot make AI chips. Assumption was always questionable. Now it’s clearly wrong," Huang told CNBC.
In response to lifting the export restriction on H200 chips to China, Huang said in a statement obtained by Reuters that the new deal, as "vetted by the Department of Commerce, strikes a thoughtful balance that is great for America." However, it's not so cut and dry.
Citing people who supposedly have knowledge of the matter, the Financial Time reports that Beijing will limit access to NVIDIA's H200 chips as it moves to be more self sufficient. Meanwhile, Trump noted on his Truth Social post that President Xi Jinping of China "responded positively" to the U.S. green lighting NVIDIA's Hopper shipments. So, the saga continues.
