US Approves H200 AI Chip Exports to 10 Chinese Companies: NVDA Jump on Beijing Deal

Nvidia's geopolitical headwind abruptly reversed Thursday as the US approved H200 AI chip exports to 10 Chinese companies, ending a period of uncertainty that had weighed on valuations. The announcement came amid Trump's Beijing summit with Xi Jinping and signals a significant thaw in US-China tech relations. NVDA surged 4.4% on the news, with the stock having added roughly $1 trillion in market cap since May 5. For context, China represented 25% of Nvidia's historical revenue before export restrictions tightened in 2024, making this approval a material re-rating catalyst.

The reversal is striking given the macroeconomic backdrop: just hours earlier, market chatter had centred on Trump's visit yielding a Boeing deal and vague 'partnership' rhetoric. The chip export approval is more concrete and directly addresses a pain point for Nvidia's Asia strategy. CEO Jensen Huang is currently in Beijing and has been spotted eating noodles on the street, signalling a laid-back tone to negotiations. The move also undercuts the argument that US-China tech decoupling is irreversible; instead, it suggests a more transactional, deal-by-deal approach under the Trump administration.

The broader semiconductor complex was volatile on the day: AMD and Broadcom also traded on expectations that similar relief could come to them. However, the bond selloff and inflationThe rate at which prices rise across an economy. fears kept the upside capped. NVDA held its gains by day's end, but investors are weighing the positive geopolitical signal against near-term earnings risks (NVDA reports earnings next week) and the possibility that Chinese demand may be partly satiated already, given prior pre-ban chip hoarding.

The debate hinges on sustainability: will the approval lead to sustained orders, or is it one-off procurement? Sceptical voices note that China has been building indigenous AI chip capabilities and may not need full-priced Nvidia gear if domestic alternatives mature. Additionally, the approval process could be reversed as quickly as it was granted if political winds shift, making this a fragile positive for Nvidia's long-term China narrative.