US Approves NVIDIA H200 Exports to China, Lifting 25% Revenue Headwind

In a stunning geopolitical reversal, the US Commerce Department has granted export licenses allowing NVIDIA to sell its H200 AI accelerators to a limited set of Chinese firms. This move is striking because it undercuts months of Biden-era restrictions aimed at starving China of advanced semiconductor technology. With China historically representing roughly one-quarter of NVIDIA's revenue, the approval signals a significant shift in the Trump administration's approach to tech competition.

The timing is noteworthy: the announcement comes just after President Trump's two-day summit in Beijing with Xi Jinping, where the two leaders held a cordial series of meetings on trade, rare earths, and other bilateral issues. While the summit itself produced no major concrete agreements, the approval of chip exports suggests that behind-the-scenes negotiations are moving forward. The explicit designation of 10 Chinese companies as approved end-users suggests a managed approach rather than a blanket reversal; it is a carve-out, not a free-for-all.

For NVIDIA, the implications are profound. The H200 is the company's newest generation AI accelerator, and if even a fraction of that lost China revenue stream returns, it would add several billion dollars in annual sales. NVIDIA stock initially surged on the news, though broader market weakness on Friday capped the gain. Rival chipmakers including AMD and Broadcom could also benefit if their export licenses are similarly loosened, though details on those approvals remain sparse.

The risks are significant. Chinese competitors including Huawei and local startups are accelerating their own AI chip development. If China proves it can build competitive alternatives even with restricted access to US chips, the long-term strategic advantage of export controls diminishes. Additionally, Congress and the defense establishment may pushback on the approvals, citing national security concerns. The new administration's stance on China is still crystallizing, and reversals are possible.