Beijing reportedly approved the sale of hundreds of thousands of Nvidia H200 chips to Chinese AI companies—the culmination of a dramatic shift in US tech policy.
Jensen Huang sure seems to be having a lot of fun in China this week. The Nvidia CEO has been spotted going for a leisurely bike ride and browsing a fresh fruit stand in Shanghai, as well as enjoying beef hot pot at a humble restaurant in Shenzhen.
The carefree tour is not just good optics. Huang has real reason to be feeling upbeat: His long-running lobbying campaign in Washington has, in effect, finally paid off. While Huang was gallivanting around China, multiple news outlets reported that Beijing had approved the sale of hundreds of thousands of powerful Nvidia H200 AI chips to Chinese companies. According to Reuters, China has agreed to allow ByteDance, Alibaba, and Tencent to buy more than 400,000 of the chips in total under conditional licenses granted during the Nvidia CEO’s visit. More approvals are expected in the coming weeks. The purported chip sales are the culmination of a stunning American policy reversal over the past year. Under the Biden administration, the US sharply tightened export controls on high-end AI chips and barred models such as the H200 from being sold to Chinese customers due to national security concerns. The restrictions were meant to limit Beijing’s ability to develop powerful artificial intelligence systems with military or other sensitive applications. But under President Trump, a different logic—promoted by Huang and White House AI and crypto czar David Sacks—has prevailed. They argued that allowing China access to some American AI chips was better than ceding such a large and important market entirely to Chinese chipmakers, both economically and because it would theoretically keep Chinese firms dependent on US technology. In recent internal discussions, White House officials have also justified the H200 sales by pointing to the continued smuggling of advanced chips into China, which they argue proves US restrictions have been ineffective, according to two people familiar with the matter. The officials contend that allowing limited, regulated sales is preferable to an opaque gray market that gives US authorities little visibility into where the chips could ultimately end up. The White House did not immediately respond to a request for comment. It’s not just Huang and the Trump administration that are likely walking away happy here. By allowing domestic companies to buy H200 chips in limited quantities, Beijing has the opportunity to achieve two strategic goals at once, says Samuel Bresnick, a research fellow at Georgetown’s Center for Security and Emerging Technology. China’s domestic tech champions can now get access to the compute they desperately need to train powerful, near-frontier AI models on par with the latest offerings from OpenAI and other American labs. But by keeping tight control over who gets to buy Nvidia’s hardware, Beijing is helping ensure demand for Huawei chips remains high and there are still strong incentives for companies to continue building out China’s domestic semiconductor ecosystem. That outcome is “excellent evidence that this David Sacks idea of keeping China hooked on American technology is just not how this is going to go,” says Bresnick. “I see this as proof that China is totally uncomfortable with the idea of letting its own burgeoning chip industry be swamped by Nvidia.” But the real damage may stem from the whiplash in Washington. For years, policymakers have sent mixed signals about what the US wants to accomplish with chip controls, and China has been watching closely. “The worst possible thing we can do is just go back and forth,” says Bresnick. “We have already given China the imperative to get their own chips going while also giving them access at the same time.” This is an edition of Zeyi Yang and Louise Matsakis’ Made in China newsletter. Read previous newsletters here.
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