Trump-Xi summit sparks NVIDIA and China AI rally

Jensen Huang boarded Air Force One alongside Trump for a historic summit with Xi Jinping on May 13, marking the first time a NVIDIA CEO has joined a presidential delegation to China in recent years. The symbolism was not lost on markets: Chinese AI model developers and chip-adjacent names surged as traders repriced expectations around US export controls on advanced semiconductors, particularly the H200 GPU that has been largely off-limits to mainland Chinese firms.

NVIDIA shares jumped on the development, with market participants interpreting Huang's presence as a signal that the Trump administration may be seeking negotiated carve-outs or softened restrictions on AI chip sales. The move also energized the broader China delegation, which included Elon Musk of Tesla, Tim Cook of Apple, Larry Fink of BlackRock, and CEO Stephen Schwarzman of Blackstone. This concentration of heavyweight tech and investment figures sent a clear message to Beijing: US business leaders are seeking normalization of trade relations, especially in high-value sectors like semiconductors and AI infrastructure.

The chip narrative stands to benefit NVIDIA, AMD, Broadcom, and other semiconductor manufacturers if export controls are relaxed, as China represents a massive untapped market for advanced processors. Chinese AI companies would gain access to cutting-edge hardware, potentially accelerating their own model development and cloud service offerings. However, US defense and national-security hawks argue that loose chip restrictions undermine technological and military advantages, creating a political constraint on any final deal.

The contrarian view warns that expectations may be overheated. Previous summits have yielded modest results on trade, and Beijing has shown willingness to develop domestic chip alternatives even under restrictions. Additionally, congressional pressure on China policy remains strong, potentially limiting Trump's room to maneuver on semiconductor exports without facing domestic backlash.