lipflip – NVIDIA can now sell its H200 AI processors to China, expanding beyond the previously allowed H20 model. Former President Trump announced the decision on Truth Social, saying he informed Chinese President Xi Jinping, who “responded positively.” The Commerce Department confirmed the United States will collect a 25 percent tariff on these sales. This rate is higher than the 15 percent suggested earlier in August.
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The administration emphasized that the latest Blackwell and upcoming Rubin chips will remain restricted to protect national security. The deal applies to NVIDIA’s H200, considered their second-best processor, while the H20 is designed to comply with existing export restrictions. Details on the quantity of chips or eligible Chinese buyers have not yet been disclosed.
NVIDIA stated that selling H200 chips to approved commercial customers, vetted by the Commerce Department, represents a careful balance for American interests. The company acknowledged concerns about losing business to Huawei if completely shut out of the Chinese market. Reports suggest that some high-end NVIDIA chips, including the Blackwell B200, have already reached China through black market channels. The B200, along with H100 and H200 chips, offers far greater performance than the H20. For example, the H200 is six times faster than the H20, and the B200 is nearly ten times faster than the H200 for certain tasks.
The decision has drawn criticism from several Democratic senators, who called it a “colossal economic and national security failure” that could strengthen China’s industry and military. Republican Representative John Mollenaar warned that China could replicate the technology and attempt to surpass NVIDIA. Despite these warnings, the administration prioritized controlled commercial access while safeguarding the highest-performing chips.
Implications for NVIDIA and China’s AI Development
Washington’s approval does not guarantee that China will purchase NVIDIA’s H200 chips. Beijing has previously instructed companies to avoid using U.S. technology. Huawei, the most advanced Chinese company in AI chips, recently announced a three-year plan to catch up with NVIDIA and AMD. However, experts like Richard Windsor maintain that NVIDIA’s technology remains far ahead of what Chinese firms can currently produce.
The U.S. plan mirrors approaches for other companies, including AMD and Intel, ensuring oversight of AI chip exports while collecting tariffs. The move aims to balance commercial opportunity with national security considerations. NVIDIA benefits by retaining market access in China, a critical region for AI applications. The tariffs provide financial returns to the U.S. government and limit unrestricted technology transfer.
Industry observers suggest that controlled sales could help U.S. companies maintain competitiveness while monitoring technology flow. Analysts note that China’s black market access to high-end chips illustrates both demand and enforcement challenges. NVIDIA’s H200 chips, while not the absolute highest-end models, remain critical for AI computations, advanced data centers, and large-scale machine learning projects.
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Looking forward, U.S. oversight and strategic limits on Blackwell and Rubin chips aim to protect defense and critical infrastructure applications. The decision reflects the complexity of balancing commercial trade, global AI competition, and national security concerns. China’s ambitions to develop indigenous AI chips will likely continue, but NVIDIA retains a technological edge for the foreseeable future.