U.S. approves Nvidia H200 chip exports to 10 Chinese firms: NVDA gains on geopolitical surprise

In a stunning reversal of longstanding U.S. technology export controls, the Trump administration has approved Nvidia's sale of H200 AI chips to 10 Chinese companies, effectively lifting the semiconductor export embargo that had constrained the chip maker's revenue and geopolitical positioning. The approval came during Trump's two-day summit with Chinese President Xi Jinping in Beijing on May 15, signaling a thaw in U.S.-China tech tensions and a potential reset on the trade war that has defined the past four years.

For Nvidia, the implications are massive. China accounted for roughly 25% of the company's total revenue before sanctions tightened in 2023-2024. The loss of that market segment forced Jensen Huang to pivot to domestic and allied markets, develop export-controlled variants, and focus on AI inference chips not yet banned. The H200 approval now opens a direct path back into the Chinese market for high-performance training chips, the most profitable segment of Nvidia's data center business. Investors immediately reflected this in NVDA's 4.4% intraday rally, though the stock closed modestly below its session high amid broader market weakness driven by the bond selloff.

The geopolitical narrative is equally significant. Trump has made a show of his 'very strong' relationship with Xi, and the chip export deal is a tangible deliverable for his administration to point to as evidence of a more pragmatic, deal-focused approach to China policy. This contrasts sharply with Biden-era sanctions that were driven by national security concerns and Cold War logic. The message to markets is that Trump prioritizes near-term business opportunities and leverage in trade negotiations over longer-term technological decoupling from China.

However, skeptics worry that lifting chip restrictions weakens U.S. technological advantage and enables China's AI arms race at a critical juncture. Military and defense hawks argue that advanced AI accelerators destined for Chinese data centers could eventually support surveillance, autonomous weapons, or economic espionage. Some analysts also worry that the approval signals the beginning of a broader rollback of export controls that could undermine allies like Taiwan and South Korea. Yet for tech investors and chip equipment makers, the near-term signal is clear: the 'deglobalization' thesis that dominated 2023-2024 is being replaced by selective, deal-by-deal liberalization.