The Trump administration has launched an inter-agency review that could clear the first-ever sales to China of Nvidia’s H200 artificial intelligence chips, the company’s second-most powerful offering. The Commerce Department has sent export license applications to the State, Energy and Defense Departments, triggering a 30-day review process, though the final decision rests with President Donald Trump. Trump has said he would allow the sales with a 25% fee collected by the U.S. government, arguing the move would keep American firms ahead of Chinese rivals. The review marks a significant departure from restrictions imposed under President Joe Biden, who had banned advanced AI chip exports to China over national security concerns.
Why it matters
Advanced AI chips are seen as a critical bottleneck in China’s push to match U.S. capabilities in artificial intelligence and military applications. Allowing sales could bring billions in revenue to Nvidia and reinforce U.S. dominance in global AI hardware, but critics warn it risks accelerating Beijing’s technological and military development. The move also signals a broader recalibration of U.S. export controls, prioritising commercial advantage and technological leadership over strict containment, and has sparked backlash from China hawks across the U.S. political spectrum.
Nvidia stands to gain from renewed access to a major market after demand from China reportedly exceeded current H200 production capacity. The U.S. government’s Commerce, State, Energy and Defense Departments are central to assessing the national security risks, while the White House retains ultimate authority. China’s tech firms, including competitors such as Huawei, could benefit indirectly from access to advanced chips, even as Beijing weighs whether to approve purchases. U.S. national security advocates and former officials have emerged as vocal critics, warning of long-term strategic consequences.
What’s next
The reviewing agencies will deliver their assessments within 30 days, after which Trump can approve or reject the licenses regardless of objections. If approved, shipments of H200 chips to China would begin for the first time, setting a precedent for future AI hardware exports. The decision is likely to intensify debate in Washington over the balance between economic competitiveness and national security, and could reshape the trajectory of U.S.-China technology rivalry.
With information from Reuters.
