The United States Commerce Department has allowed Nvidia to sell certain advanced artificial intelligence chips to China under strict conditions. The decision follows a policy change announced last month by President Donald Trump.
Under the new approach, Nvidia can sell its H200 chip to Chinese buyers if specific requirements are met. One of the key conditions is proof of “sufficient” supply within the United States. However, sales of the company most advanced processors will remain blocked.
There is growing uncertainty over how much demand will come from China. Reports suggest that the Chinese government is encouraging local technology firms to rely more on homegrown chips. According to a news website, some Chinese officials have told companies they would approve H200 purchases only in special cases. These include use in development labs or university research.
The same report said that officials had earlier asked firms to pause buying these chips while considering rules that may require them to purchase a certain share of artificial intelligence chips from Chinese competitors.
In its official update, the Commerce Department Bureau of Industry and Security said it has changed its licensing policy for H200 and similar chips. Instead of automatic rejection, applications will now be reviewed on a case by case basis.
President Trump announced on December 9, 2025 that he had reached an agreement with Chinese President Xi Jinping to allow these exports. He also said the US government would receive a 25 percent share of the sales.
This move marks a major shift from the earlier approach of the previous administration, which had placed heavy restrictions on advanced chip exports over national security concerns related to possible military use.
Democrats in Congress have criticised the decision, calling it a serious mistake that could benefit China military and economy.
Nvidia chief executive Jensen Huang has supported the change. He has argued that it is important for artificial intelligence systems around the world to be built using US technology.
The chips, known as graphic processing units or GPUs, are used to train artificial intelligence models. These models power the global generative AI boom that began with the launch of ChatGPT in 2022.
Nvidia currently dominates the GPU market and is the most valuable company in the world, driven by strong global demand for AI tools.
China and the United States continue to compete for leadership in artificial intelligence. The H200 chip is about 18 months behind Nvidia most advanced products, which will still not be sold to China.
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