The Trump administration on Tuesday gave a formal green light to China-bound sales of Nvidia's (NVDA.O), opens new tab 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.
In a statement, Nvidia said the move by U.S. President Donald Trump "strikes a thoughtful balance that is great for America" and will help the company compete in the global chip market.
"The administration's critics are unintentionally promoting the interests of foreign competitors on U.S. entity lists - America should always want its industry to compete for vetted and approved commercial business, supporting real jobs for real Americans," Nvidia said.
"China has consistently advocated that China and the United States achieve mutual benefit and win-win results through cooperation," Liu Pengyu, a spokesperson for the Chinese embassy in Washington, said in a statement. "We oppose blocking and restricting China, which disrupts the stability of industrial and supply chains."
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.
Jay Goldberg, an equities analyst with Seaport Research, said the caps on exports appeared to be a compromise that put some restrictions on Nvidia's China sales but might be difficult to enforce.
