Policy Shift on Nvidia H200 AI Chips
In a surprising policy shift, the U.S. government has decided to allow Nvidia to sell its advanced H200 AI chips to certain Chinese customers. This decision marks a significant change in the ongoing AI competition between the U.S. and China, offering benefits for all parties involved.
Announcement and Terms
President Donald Trump announced this week that Nvidia can sell its H200 AI chips to some Chinese customers. As part of the deal, Nvidia will pay 25% of the sales revenue to the U.S. government. This move departs from previous policies that restricted the sale of advanced AI chips to China due to national security concerns.
Previous Restrictions
Under the prior administration, the sale of H200 chips to China was banned to prevent potential military applications. Only the less advanced H20 chips were permitted, prompting China to accelerate development of its own AI chips, with companies like Baidu introducing new models in recent months.
Expert Perspectives
Experts suggest that the ban on AI chip exports to China was not achieving its intended effect. Kashyap Kompella, CEO of RPA2AI Research, notes that the U.S. position on AI chips may no longer be effective and could be reaching diminishing returns. The new policy aims to balance national security with commercial gains.
Trade Policy Context
The decision to allow the sale of H200 chips is part of a broader trade policy negotiation between the U.S. and China. James Cooper, a professor of law at California Western, points out that this move involves multiple factors and concessions, reflecting a complex diplomatic landscape.
Benefits for All Parties
- U.S.: Financially advantageous, generating revenue without compromising national security, while supporting American jobs and manufacturing.
- Nvidia: Regains access to a significant market, ensuring sustained growth and maintaining its position in the AI chip arena.
- China: Continues its dual strategy—developing domestic chips while accessing foreign technology for commercial use.
Market Reactions
While some Chinese businesses may be skeptical, the policy allows private companies to acquire advanced AI chips, leaving state‑owned enterprises to focus on domestic development.
Conclusion
Allowing Nvidia to sell its H200 AI chips to China is a strategic move that benefits all parties: it generates revenue for the U.S., expands Nvidia’s market access, and provides China with continued access to cutting‑edge AI technology while it builds its own capabilities.
