US Approves NVIDIA H200 Chip Sales to 10 Chinese Companies; Jensen Huang in Beijing

The approval of NVIDIA H200 chip exports to Chinese companies marks a notable relaxation of US export controls that have defined the past 18 months of semiconductor policy. The H200 is a more powerful variant of the H100, and its approval to 10 named Chinese entities suggests the Biden-era blanket restrictions are being selectively loosened under Trump's more transactional approach. The timing is not coincidental: Huang's presence in Beijing as part of Trump's delegation, combined with the same-day export approval, signals a coordinated effort to ease tech tensions.

NVIDIA's stock response was emphatic. The company hit a $5.5 trillion market cap, becoming the first publicly traded company ever to reach that valuation milestone. This reflects not only relief that China export restrictions are easing, but also confidence that Trump's bilateral negotiations with Xi will result in a broader normalization of semiconductor trade. For NVIDIA, China has historically represented 20-25% of revenue; a sustained easing of restrictions could unlock $10-15 billion in annual upside, a material lever on earnings growth.

However, the approved list is limited (10 companies) and the H200 approval is still subject to vetting. The US is not blanket-clearing all chips or all Chinese buyers; rather, it is calibrating restrictions to favor large, state-approved entities (likely Alibaba, Tencent, ByteDance, Baidu, and others) while maintaining controls on smaller or military-adjacent firms. This suggests the US strategy is shifting from embargo to managed competition, allowing US tech leaders to monetize China's AI buildout while maintaining strategic leverage over chip architectures.

The debate centers on whether this is a durable reset or a tactical concession that could be reversed if China tensions reignite. If Taiwan policy deteriorates or trade talks collapse, export controls could snap back to full restriction. Additionally, some analysts worry that approving H200 sales to Chinese competitors will accelerate the development of homegrown Chinese AI models (like Alibaba's Qwen), which could displace NVIDIA's moatA sustainable competitive advantage that protects long-term returns on capital. over time. The near-term market reaction is bullish, but the long-term implications depend on the durability of the Trump-Xi reset.