Nvidia Has Permission to Sell H200 Chips to China. Why It Might Not Matter Much for the Stock.

President Donald Trump during a roundtable in the Cabinet Room of the White House in Washington, DC, on Monday, Dec. 8, 2025. (Yuri Gripas/Abaca/Bloomberg)

Key Points

• President Donald Trump announced plans to permit Nvidia to sell its H200 AI chips to approved customers in China, with a 25% fee payable to the U.S. government.
• The Commerce Department will finalize details, and similar deals will be allowed for Advanced Micro Devices and Intel.
• Nvidia shares were falling on Tuesday.

While President Donald Trump plans to allow Nvidia to sell a more advanced artificial-intelligence chip to China, doubts over whether Beijing will permit sales in large volumes mean the stock isn’t receiving much of a boost.

“I have informed President Xi, of China, that the United States will allow NVIDIA to ship its H200 products to approved customers in China, and other Countries, under conditions that allow for continued strong National Security. President Xi responded positively!,” Trump said in a social media post on Truth Social on Monday.

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China has effectively banned the country’s technology companies from buying Nvidia hardware. Nvidia has said its current financial guidance doesn’t assume any revenue from China.

It remains to be seen whether Chinese authorities will allow Nvidia to sell the H200 in the country. Regulators in Beijing are discussing allowing only limited access to the chips, the Financial Times reported Tuesday, citing people familiar with the matter.

Nvidia shares fell 0.5%% in midday Tuesday.

“The sale of H200 chips into China is likely to drive upside to the current fiscal 2027 revenue expectation—Nvidia estimates China represents a $50 billion TAM [total addressable market] for GPUs,” wrote William Blair analyst Sebastien Naji in a research note. “That said, we are not changing our forward-looking estimates at this time and will look for more evidence that China is putting in orders for these chips before becoming more constructive.”

Trump seemed to imply Nvidia will pay a 25% fee on any H200 sales to China, adding: “$25% will be paid to the United States of America.”

Trump said the Commerce Department will finalize the details, and the government will allow Advanced Micro Devices and Intel to do similar deals. A 25% rate seems to be higher than the 15% that Trump spoke about for the H20 AI chip in August.

The H200 is more advanced than the H20, but is not as powerful as Nvidia’s current generation Blackwell AI chips. As Nvidia’s newer chips are increasingly made on more advanced manufacturing process nodes at TSMC, there will be additional capacity to make H200s for China.

“We applaud President Donald Trump’s decision to allow America’s chip industry to compete to support high paying jobs and manufacturing in America,” an Nvidia spokesperson said in an emailed statement. “Offering H200 to approved commercial customers, vetted by the Department of Commerce, strikes a thoughtful balance that is great for America.”

There has been a lot of back and forth developments on whether Nvidia would be allowed to sell chips to China this year. In April, Trump banned the sales of the H20 to China. The H20 is an AI chip specifically designed for the Chinese market and compliant with U.S. export restrictions from the prior administration.

In May, Nvidia said the decision to ban the H20 had a negative revenue impact of $10.5 billion in total across the April and July quarters. Trump reversed his H20 ban in July, but then China implemented its own ban and told companies to not purchase the H20 chips.

Impeding American companies from selling AI chips to China may be a mistake for the U.S. that could give China a foothold in the AI arms race. Without Nvidia’s products in the Asian country, Chinese AI chip makers will be able to generate tens of billions in revenue, which will provide resources for more R&D and software improvements for the upstart rivals. It may eventually empower Chinese chip makers to become competitive with Nvidia in other global markets.

Allowing Nvidia to sell chips that are one generation behind could be a good compromise.

Write to Tae Kim at tae.kim@barrons.com and Adam Clark at adam.clark@barrons.com