- The U.S. government has approved the export of NVIDIA H200 AI chips to certain customers in China under new rules.
- Officials have expressed uncertainty about whether Chinese companies will accept these chips, aiming instead for local semiconductor independence.
- Potential revenue from H200 sales in China could reach $10 billion annually if accepted, but early signs indicate China is focused on developing its domestic chip industry.
- Some U.S. lawmakers have raised national security concerns about shipping AI chips to China, fearing it could strengthen China’s military and technology sectors.
- Despite the new policy, retail sentiment around Nvidia stock has remained neutral, and the company’s share price has risen significantly over the past year.
On Monday, President Donald Trump announced that the United States will allow Nvidia to export its H200 Artificial Intelligence chips to “approved customers” in China and other countries, as long as certain conditions are met. However, White House AI czar David Sacks signaled uncertainty about the effectiveness of this strategy. Speaking on Friday, he cited news reports that China appears to be rejecting the H200 chips in favor of domestically developed semiconductors, reflecting its goal to achieve greater technology independence.
According to Sacks, “They’re rejecting our chips…Apparently they don’t want them, and I think the reason for that is they want semiconductor independence.” The H200 model is about 18 months behind Nvidia‘s most advanced chips, such as the Blackwell and Rubin series, which remain restricted from export to ensure the U.S. maintains a technological lead.
The decision to permit H200 exports was intended to gain market share from major Chinese firms like Huawei Technologies, but Sacks suggested that Chinese authorities have anticipated the U.S. move and are actively discouraging adoption of U.S. chips. He stated, “That was part of our calculation, of selling not the best but lagging chips to China, is that you can take market share away from Huawei, but I think the Chinese government has figured that out, and that’s why they’re not allowing them.”
Bloomberg Intelligence estimates that H200 chip sales could have generated up to $10 billion per year in China if the chips were widely adopted. A Nvidia spokesperson told Bloomberg that the company continues to collaborate with U.S. officials on export licenses for the H200, but noted that three years of export controls have “fueled America’s foreign competitors and cost US taxpayers billions of dollars.” Nvidia CEO Jensen Huang has also questioned whether China would accept these chips, even if restrictions were eased.
China is reportedly considering subsidy packages that could total as much as $70 billion to support its domestic chip industry, as reported by Bloomberg. These incentives are aimed at bolstering local manufacturers amid growing competition in artificial intelligence technology.
A group of seven U.S. Democratic senators, including Elizabeth Warren, criticized the H200 export approval in a letter to the Commerce Secretary, warning, as reported, that it could threaten national security if the technology benefits China’s military or tech sectors.
Meanwhile, discussions among retail investors on Stocktwits indicate a neutral outlook for Nvidia shares, even as the company’s stock price has gained 30% since the beginning of the year and 27% over the past 12 months.
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