Nvidia, the American company, is the protagonist of today’s article. Why? Because the U.S. government has decided to allow Nvidia to send China its H200 chips, which are one of the most advanced chips in the world for artificial intelligence. I know this might seem like a very technical or complex article to read, but we are here to explain everything in simple terms. So, let’s learn more about this.
What’s happening with Nvidia chips?
The U.S. decided that Nvidia could sell China its H200 chips, which are the company’s second-best AI processors—very powerful, but not the newest or most advanced ones. In return, the U.S. government will collect a 25% fee for every sale.
Donald Trump said he told China’s President Xi Jinping about the decision. According to Trump, Xi responded positively. This decision comes after a long debate inside the U.S. government with leaders trying to decide what is more important: Letting Nvidia keep its global lead by selling chips to China or blocking sales to protect national security.
The thing is that China has started saying to its companies not to use American technology, so even if the U.S. allows sales, it’s unclear whether Chinese companies will want to buy the chips.
What this means for Nvidia
Nvidia’s stock price went up when the news was announced. The company said that selling the H200 under the supervision of the U.S. government is a balanced and positive measure for the U.S.
However, the U.S. is not allowing Nvidia to sell its newest and most advanced chips (Blackwell and Rubin) to China. Only the H200 chips are included in this deal.
What’s more, it was confirmed the 25% tariff will be a tax in the United States as an import tax. The chips are made in Taiwan, shipped to the U.S. for security inspection, and then exported to China if they pass the review.
Worries about selling these chips to China
In Washington, some leaders fear selling advanced chips to China because it might help the country reinforce its military technology. This is why both the previous and the recent government have implemented limits to what it can be exported.
Trump said he won’t allow selling the most advanced Nvidia chips to China, but he will allow selling the H200s because, if the U.S. doesn’t sell them, China could just buy chips to other companies like Huawei–which is improving very fast its own products.
Yet, several Democrat and Republican politicians criticized the decision, saying it’s a mistake that could put national safety at risk and benefit China.
How powerful are the H200 chips?
According to a report from the Institute for Progress (IFP), the H200s are almost 6 times more powerful than the H20 chips. The latter were the most advanced chips the U.S. allowed selling to China until now. However, the Blackwell chips, which are used in artificial intelligence companies inside the U.S., are even faster:
- About 1.5 times faster than the H200 for training AI.
- Up to five times faster for running AI models.
- In some tasks, Blackwell can be ten times faster than H200.
China’s reaction
China has been warning its tech companies not to buy the “downgraded” chips Nvidia created for China—chips like the H20, L20, and RTX 6000D. But experts say the H200 would be much more useful for China’s needs.
Others caution that China will continue focusing on developing its own advanced chips, no matter what. China likely sees this as a temporary opportunity and wants to avoid depending on U.S. technology in the future. China already has several companies working on AI chips, including Huawei, Cambricon, and Moore Threads.
So…
Even though the H200 chips can now be sold under strict conditions, no one knows how long this policy will last—or how China will respond. What is clear is that the race for AI leadership is becoming more intense, and decisions like this will continue to shape the global tech landscape.