US approves advanced chip exports to China; NVDA, AMD post big moves

The US has abruptly loosened restrictions on advanced semiconductor exports to China, approving shipments of Nvidia H200 chips to a select group of 10 Chinese firms. This marks a significant softening of the tech-centric sanctions regime that had dominated US-China trade policy since 2022. The reversal comes amid Trump's high-profile summit with Xi Jinping in Beijing, suggesting a broader softening in bilateral tensions. Nvidia's stock surged on the news, as China represented roughly 25% of the company's pre-restriction revenue; the potential restoration of that channel is material.

AMD and other chipmakers are also rallying on relief that the worst of export constraints may be easing. However, the move has triggered sharp debate about whether the US is surrendering strategic advantage in AI and advanced computing. Nvidia's CEO Jensen Huang was photographed eating noodles on a Beijing street during the summit, underscoring the thaw. Samsung's sell-off in Seoul earlier in the week had rippled into US futures, pressuring chip stocks on Korea-related geopolitical risk; Friday's export approval news offset some of that weakness.

The broader implication is complex. If China can now access top-tier AI accelerators, it accelerates Beijing's AI infrastructure buildout and potentially narrows the US technological edge. On the flip side, Nvidia's valuation has been inflated by supply-constrained scarcity; re-opening the China channel could reduce near-term pricing power and trigger margin compression if competition intensifies. The timing coincides with NVDA's earnings next Wednesday, where management will likely address both the export approval and demand sustainability.

Skeptics note that geopolitical thaws are often temporary. A renewal of US-China tensions could reverse this policy just as quickly. Additionally, the volume of chips approved to China may be far smaller than the pre-restriction baseline, limiting revenue upside. Some argue the move is purely optics for Trump's summit rather than a durable shift in tech policy.