US Approves Nvidia H200 Chip Sales to China; NVDA Up 4.4% as 25% Revenue Window Reopens

In a surprising geopolitical pivot, the Trump administration approved Nvidia to sell its latest-generation H200 AI accelerators to a select group of Chinese firms, marking the first meaningful relaxation of semiconductor export controls in 18 months. This reversal shocked both hawks and doves; Nvidia had been operating under a de facto China sales freeze since late 2024, which led the company to develop China-specific chips (Gaudi variants) and redirect revenue. The batch contains mentions of traders flagging that this approval could unlock $1 billion+ of incremental quarterly revenue if Chinese buying resumes.

The timing collides with Nvidia's earnings season (scheduled for May 22 in the batch) and broader debate over whether the semiconductor complex has already priced in peak capex. Nvidia's stock added roughly $1 trillion of market cap in the month of May alone, pushing its valuation close to $5.7 trillion; the H200 approval provided fresh catalyst momentumThe empirical fact that winners keep winning over the medium term. on May 14. Some mentions note that China was 25% of Nvidia's revenue pre-ban, and if that window reopens, consensus estimates (which have been using zero or minimal China revenue) could require significant upward revision.

However, the approval is narrowly tailored: only 10 designated Chinese companies can buy, and the H200 is bandwidth-constrained (no new 200Gbps interconnect). Large cloud players like Alibaba, Tencent, and Baidu were not explicitly listed as eligible. This suggests the move is more about maintaining diplomatic relations with Xi Jinping (Trump just concluded a summit in Beijing) than a full strategic reversal. Semiconductor strategists in the batch note that AMD and Broadcom (which also sell to China) face similar dynamics, but neither benefit as directly as Nvidia from AI capex.

Sceptics warn that this approval could be reversed with the next geopolitical flare-up, and that Chinese firms are already building homegrown AI chips (Huawei, Ascend). Others note that selling advanced chips to China while negotiating trade war with Xi is contradictory policy. The batch contains quotes from Nvidia CEO Jensen Huang on energy demand for AI justifying massive capital intensity, but no clarification on China strategy from the company itself.