U.S. President Donald Trump has granted the sale of more powerful Nvidia AI chips to China, allowing the company to export its previous-generation H200s, in a move welcomed by the company as "a thoughtful balance" amid recent tech tensions between the world's two largest economies.
The U.S. government will retain 25% of the revenue from those sales, Trump said on his platform Truth Social on Monday. The approval does not apply to Nvidia's latest Blackwell generation or its upcoming Rubin line, he said.
The decision appears to settle a U.S. debate about whether Nvidia and rivals should maintain their global lead in AI chips by selling to China or withholding the exports – although Beijing had earlier told companies not to use U.S. technology, leaving it unclear whether Trump's decision would lead to new sales.
Nvidia shares rose 2% in after-hours trading after Trump's announcement on Truth Social, following a 3% rise during the day on a report by Semafor.
Trump said in his post that he had informed President Xi Jinping of China, where Nvidia's chips are under government scrutiny, about the move and that he "responded positively."
He said the U.S. Commerce Department was finalizing details of the arrangement and the same approach would apply to other AI chip firms such as Advanced Micro Devices (AMD) and Intel.
Trump's post said the fee to be paid to the U.S. government was "$25%," and a White House official confirmed he meant 25%, higher than the 15% proposed in August.
Nvidia dominates the global market for AI chips used to train and operate artificial intelligence systems. The U.S. company has seen its business in China collapse after Washington tightened export controls and Beijing responded with restrictions on purchases.
The restrictions have shifted repeatedly. Nvidia was initially allowed to sell only a downgraded model called the H20. The Trump administration then broadened the ban earlier this year, before later allowing exports on the condition that part of the proceeds go to the U.S. government.
China subsequently instructed companies not to buy the significantly lower-performance H20 chips.
Long-standing U.S. curbs aim to slow China's advances in AI, which can also be used for military purposes.
Nvidia chief executive Jensen Huang, who has developed close ties with Trump, has argued that efforts to block China's access will not halt its progress, but could accelerate the development of domestic rivals that may later challenge U.S. firms globally.
He said Nvidia must be able to sell into China if U.S. technology is to maintain its dominance.
Nvidia welcomed the decision, calling the ability to sell H200 chips to vetted customers "a thoughtful balance" that benefits the U.S.
"We will protect National Security, create American Jobs and keep America's lead in AI," Trump also wrote in his post on Truth Social.
"NVIDIA's U.S. Customers are already moving forward with their incredible, highly advanced Blackwell chips, and soon, Rubin, neither of which is part of this deal."
Trump did not say how many H200 chips would be authorized for shipment or what conditions might apply, only that exports would occur "under conditions that allow for continued strong National Security."
Administration officials consider the move a compromise between sending Nvidia's latest Blackwell chips to China, which Trump has declined to allow, and sending China no U.S. chips at all, which officials believe would bolster Huawei's efforts to sell AI chips in China, a person familiar with the matter said.
Intel declined to Reuters for comment. The U.S. Commerce Department, which oversees export controls, and AMD did not respond to requests for comment.
A White House official said that the 25% fee would be collected as an import tax from Taiwan, where the chips are made, to the U.S., where the chips will undergo a security review by U.S. officials before being exported to China.
China hawks in Washington are concerned that selling more advanced AI chips to China could help Beijing supercharge its military, fears that had first prompted limits on such exports by the Biden administration.
The Trump administration had been considering greenlighting the sale, sources told Reuters last month. Trump said last week he met with Nvidia's Huang and that the executive was aware of where he stood on export controls.
"It's a terrible mistake to trade off national security for advantages in trade," said Eric Hirschhorn, who was a senior Commerce Department official during the Obama administration. "It cuts against the consistent policies of Democratic and Republican administrations alike not to assist China's military modernization."
According to a report released on Sunday by the non-partisan think tank, the Institute for Progress (IFP), the H200 would be almost six times as powerful as the H20, the most advanced AI semiconductor that can legally be exported to China, after the Trump administration reversed its short-lived ban on such sales this year.
China emphasized its belief that mutual benefit through cooperation with the U.S. is essential, the Foreign Ministry said on Tuesday, after the U.S. announced its decision to approve exports of H200 chips.
