Nvidia Has Trump’s Permission to Sell Chips to China, but Not the Other Half of the Equation

Nvidia is the preferred provider of artificial-intelligence chips. (Photo by Justin Sullivan/Getty Images)

Key Points

• The U.S. plans to permit Nvidia’s H200 AI chip exports to China, requiring a 25% sales cut for the U.S. government.
• Chinese authorities have not yet confirmed if they will allow domestic companies to purchase Nvidia’s H200 processors.
• UBS analyst Timothy Arcuri estimates China shipments could add $5 billion to $10 billion in quarterly sales for Nvidia.

Nvidia stock might not get the boost from a U.S. plan to permit export of artificial-intelligence chips to China investors are hoping it will.

President Donald Trump said Monday he would allow shipments of the company’s H200 chip to China, provided that Nvidia gives the U.S. government a 25% cut of sales. However, Chinese authorities are yet to confirm if they will permit domestic companies to purchase the processors.

Nvidia’s H200 AI chips would be manufactured in Taiwan but have to travel to the U.S. for a national-security review before being sent on to China, The Wall Street Journal reported late Tuesday, citing administration officials. That could pose an additional hurdle for exports.

Also complicating matters: a report from The Information that Chinese AI startup DeepSeek is already using several thousand of Nvidia’s current-generation Blackwell chips to train its next model. The hardware was smuggled in by dismantling servers in countries where Nvidia chips are permitted to be sold and importing it to China, according to the technology-focused outlet.

“We haven’t seen any substantiation or received tips of ‘phantom datacenters’ constructed to deceive us and our OEM [original equipment manufacturer] partners, then deconstructed, smuggled, and reconstructed somewhere else,” an Nvidia spokesperson said in an emailed statement. “While such smuggling seems farfetched, we pursue any tip we receive.”

DeepSeek didn’t immediately respond to a request for comment.

China shipments could result in an additional $5 billion-$10 billion in sales quarterly if Nvidia can resume sales to the country, which could come on top of an existing $500 billion order backlog, according to UBS analyst Timothy Arcuri. He kept a Buy rating and $235 target price on the stock.

Nvidia shares closed down 0.6$ at $183.78 Wednesday after dropping 0.3% on Tuesday, while the S&P 500 rose 0.7% and the Dow Jones Industrial Average was up 1.1%. Among other chip makers, Advanced Micro Devices was down 0.1% and Broadcom rose 1.6%.

Write to Adam Clark at adam.clark@barrons.com