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Markets · Narrative··Updated 27m ago
Part of: AI Capex

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

The US government approved sales of NVIDIA H200 chips to 10 Chinese companies on May 14, and CEO Jensen Huang appeared in Beijing at a Trump-Xi banquet. NVDA surged 20% in seven days to near $6 trillion market cap on signals that China trade tensions are easing and AI infrastructure demand is widening beyond the US.

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Key facts

  • US government approved NVIDIA H200 chip sales to 10 Chinese companies on May 14
  • NVIDIA CEO Jensen Huang appeared in Beijing at Trump-Xi state banquet on same day
  • NVDA surged 20% in seven days; market cap touched $5.5 trillion, third-highest globally
  • Broadcom and semiconductor suppliers rallied on prospect of widened Chinese AI infrastructure demand
  • Active equity managers underperforming; top 10 stocks now 38% of S&P 500, concentration at record highs

What's happening

NVIDIA's approval to sell H200 chips to Chinese buyers marks a significant shift in US export policy under the Trump administration. The decision comes as Elon Musk, Jensen Huang, Tim Cook and other mega-cap CEOs were photographed at a state banquet with Trump and Xi Jinping at the Great Hall of the People in Beijing, signaling a warming of US-China tech relations. Huang's physical presence in Beijing, combined with the H200 export approval on the same day, sent a powerful message to markets that restrictions on advanced chip sales to China are loosening. This directly benefits NVIDIA's data center business, which has been constrained by export rules since 2022.

NVIDIA closed at or near record levels on the news, extending a 20% rally over seven days. The company's market cap touched $5.5 trillion, making it one of the three most valuable companies on Earth. The narrative is straightforward for bulls: if China is no longer a blacklisted market for AI chips, NVIDIA's addressable market for inference, training, and enterprise customers expands by hundreds of billions of dollars. Broadcom and other semiconductor suppliers also gained on prospects of expanded Chinese demand for networking, packaging, and peripheral chips needed for large-scale AI deployments.

However, skeptics note that the market may be front-running the deal. Actual export volumes will be modest compared to total NVIDIA revenue, and geopolitical risk remains high; any escalation in Taiwan tensions or trade disputes could reverse the policy overnight. The Trump-Xi banquet was optics-heavy but produced no concrete commitments on tech trade. Additionally, institutional sentiment on mega-cap tech remains cautious; active managers are underperforming as a handful of names (NVDA, MSFT, AAPL, GOOGL, META) drive index returns. Valuation dispersion is at record highs, suggesting mean reversion risk.

What to watch next

  • 01Trump-Xi follow-up negotiations on trade and tech; any Taiwan tensions could reverse policy
  • 02NVIDIA Q2 earnings guidance on China revenue exposure and H200 demand outlook
  • 03Breadth of AI capex: Cisco, Broadcom, and networking plays vs. concentration in mega-cap chips
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