US approves H200 AI chip exports to China; NVDA faces 25% revenue re-exposure

In a sharp pivot on US-China technology policy, the Biden-Trump administration approved the export of NVIDIA's H200 AI accelerators to at least 10 Chinese companies, effectively restoring access to one of the world's largest semiconductor markets after months of restrictions. NVIDIA's stock jumped 4.4% on the news, reflecting trader recognition that this re-opens a revenue stream worth roughly $4-5 billion annually based on historical China exposure of approximately 25% of NVIDIA's total revenue.

The decision carries profound geopolitical implications. During Trump's recent summit with Xi Jinping in Beijing, both leaders signalled a reset in the tenor of trade relations, with Trump stating his relationship with Xi is "very strong." The chip export approval appears to reflect a recalibration away from blanket semiconductor restrictions toward a more targeted approach. NVIDIA CEO Jensen Huang was photographed in Beijing during the summit, underscoring the company's lobbying effort and China's priority in accessing the latest AI silicon.

However, the narrative is complicated. China has aggressively invested in homegrown chip design and manufacturing, with firms like Huawei's HiSilicon and others making measurable progress on AI accelerators. Samsung's weakness in May and North Korea geopolitical tensions spilled into US tech futures, suggesting that any euphoria over China re-engagement could be offset by broader supply-chain and geopolitical risks. AMD and other chip manufacturers also face similar export policy uncertainty, making the sector volatile to headlines on US-China relations.

Sceptics point out that export approvals can be reversed on short notice, and that China's long-term strategy is to reduce dependency on US silicon rather than maintain permanent reliance. Jensen Huang has also made controversial statements about the necessity for massive energy buildout to support AI, raising questions about whether the narrative is shifting from AI capex boom to AI energy crunch. The real test will be whether this approval signals sustained normalization or merely a tactical negotiation tactic ahead of further trade talks.