Following President Donald Trump’s announcement of a policy change last month, the US Commerce Department on Tuesday allowed Nvidia to sell cutting-edge AI processors in China under certain limits.
Sales of Nvidia’s most sophisticated processors would still be prohibited, but the modification would allow the company to sell its potent H200 chip to Chinese consumers under specific circumstances, such as demonstration of “sufficient” US supply.
However, Beijing has apparently been pushing IT companies to utilize domestic chips, raising questions about how much demand there will be from Chinese businesses.
Chinese officials have informed some tech companies they would only approve buying H200 chips under special circumstances, such as development labs or university research, news website The Information reported on Tuesday, citing people with knowledge of the situation.
The Information had previously reported that Chinese officials were calling on companies there to pause H200 purchases while they deliberated requiring them to buy a certain ratio of AI chips made by Nvidia rivals in China.
In its official update on Tuesday, the Commerce Department’s Bureau of Industry and Security (BIS) said it had changed the licensing review policy for H200 and similar chips from a presumption of denial to handling applications case by case.
On December 9, 2025, Trump declared that he and Chinese President Xi Jinping had achieved a deal that would permit Nvidia to ship its H200 chips to China, with a 25% share of sales going to the US government.
The action signaled a dramatic change in US export policy for cutting-edge AI processors, which Joe Biden’s administration had severely banned due to worries about Chinese military uses.
Congress’s Democrats have denounced the change as a grave error that will benefit China’s economy and military.
Nvidia chief executive Jensen Huang has advocated for the company to be allowed to sell some of its more advanced chips in China, arguing the importance of AI systems around the world being built on US technology.
The chips — graphic processing units or GPUs — are used to train the AI models that are the bedrock of the generative AI revolution launched with the release of ChatGPT in 2022.
The GPU sector is dominated by Nvidia, now the world’s most valuable company thanks to frenzied global demand and optimism for AI.
China and the United States are competing for dominance in AI.
H200s are roughly 18 months behind the US company’s most state-of-the-art offerings, which will still be off-limits to China.
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