- The decision allows Nvidia to resume H200 chip shipments to approved Chinese customers under strict conditions, lifting part of prior export bans.
- Critics warn that wider AI-chip access could strengthen strategic competitors, undermine US technological dominance, and destabilise global supply dynamics.
What happened: US lifts ban on Nvidia H200 AI chip sales to China
On 8 December 2025, US President Donald Trump announced that exports of the advanced “H200” AI chips from Nvidia would be allowed to approved customers in China and other selected countries — a significant reversal from previous restrictions under prior administrations. The deal includes a 25 per cent levy on these sales to the US government, and is part of a broader reset in Washington’s trade-and-technology approach.
Stocks responded quickly: Nvidia shares rose in after-hours trading, reflecting investor optimism about regained market access. Meanwhile, the same policy appears set to extend — at least in principle — to other major US chipmakers like AMD and Intel.
But the comeback is not assured. Observers point out that Beijing had recently encouraged domestic firms to avoid US-made chips as China rallies behind its own chip industry — creating uncertainty over how many orders will materialise.
Also read: US allows Nvidia H200 chips to be exported to China
Also read: Nvidia warns US may lose AI race as China surges ahead in infrastructure buildout
Why it’s important: Trade, security and the global AI race
This U-turn highlights how geopolitics and commercial interests continue to collide in the AI industry. By allowing sales under new terms, the US seems to balance economic incentives with security oversight. For Nvidia and others, the Chinese market remains too large to ignore — and resumption of exports could revive tens of billions in revenue lost under previous bans.
At the same time, critics argue that enabling China to access such powerful AI chips risks undermining US technological advantage. Some senior lawmakers call the decision a “colossal economic and national-security failure,” warning it could accelerate China’s military-AI capabilities and cyber threats.
The announcement triggered fluctuations in chipmaker stocks: while Nvidia saw a modest rise, other firms remain under pressure as investors reassess risk amid policy instability.
Moreover, China’s mixed reception to US chips — combined with regulatory warnings to avoid them — raises doubt over how many actual orders will follow. Firms that counted on broad adoption may find demand more limited than expected.
What’s next: Uncertainty amid opportunity
The deal reopening sales hinges on several uncertain variables: which Chinese firms qualify; what conditions the US imposes; and whether Beijing allows widespread deployment. For now, the scenario calls for cautious optimism.
For Nvidia, AMD and Intel, the opportunity to regain revenue is real — but only if the political wind holds steady. For governments and analysts, the decision underscores a larger tension: between economic gain and strategic risk as AI infrastructure becomes a new domain of geopolitical competition.
