Trump Administration Clears Nvidia's H200 AI Chip Sales To China, But Beijing Reportedly Limits Purchases To Special Cases

On Tuesday, the Donald Trump administration formally approved Nvidia Corporation's (NASDAQ:NVDA) sales of its H200 artificial intelligence chips to China.

US Approves H200 Exports Under New Guardrails

The approval allows Nvidia to resume shipments of its H200 chips to China, the company's second-most powerful AI processor, under a newly defined regulatory framework.

The rules require third-party testing to verify the chips' technical specifications and impose limits on the number of units China can receive compared to U.S. customers.

Under the regulations, China cannot receive more than 50% of the number of H200 chips sold to American buyers. Nvidia must also certify that sufficient supplies remain available in the U.S. before any exports are approved.

Meanwhile, China has told select tech firms it will approve Nvidia H200 chip purchases only in limited cases, such as for university research labs, reported investing.com on Tuesday (via The Information).

Security Reviews And Military Use Restrictions

Chinese customers will be required to demonstrate "sufficient security procedures" and formally attest that the chips will not be used for military purposes.

These conditions mark a significant tightening compared with earlier policies, which lacked explicit verification and usage safeguards.

Trump said last month he would allow the sales in exchange for a 25% fee paid to the U.S. government.

Following this, several leaders, including former U.K. Prime Minister Rishi Sunak. He criticized the move, saying it is “naive” to assume that these chips would not ultimately support military applications.

However, analysts, including Futurum CEO Daniel Newman, said China's best chance of remaining competitive in AI depends on continued access to Nvidia's chips.

Massive Demand Meets Political Friction

Last month, it was reported that Chinese technology firms ordered more than 2 million H200 chips for delivery in 2026, far exceeding Nvidia's current inventory of roughly 700,000 units.

Nvidia reportedly asked Taiwan Semiconductor Manufacturing Co. (NYSE:TSM) to increase production while accelerating development of its Blackwell and Rubin chips.

At the same time, Chinese authorities have reportedly instructed some domestic firms to pause H200 orders.

Nvidia Tightens Terms For Chinese Buyers

Nvidia CEO Jensen Huang said earlier this month that Chinese approval would be reflected in customer orders rather than public announcements.

The company has also reportedly toughened its commercial terms, now requiring Chinese buyers to pay in full upfront and accept rigid contract conditions, eliminating the flexibility that previously included partial deposits.

Price Action: Nvidia shares rose 0.47% during Tuesday's regular trading session to close at $185.81, then edged slightly lower to $185.80 in after-hours trading, according to Benzinga Pro.

Benzinga Edge Stock Rankings rank Nvidia in the 94th percentile for Growth and the 97th percentile for Quality. Click here to see how it stacks up against companies like AMD, TSMC and more.

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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.