U.S. Administration Considers Easing Nvidia Chip Export Ban to China

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A significant policy shift is underway as the Trump administration initiates an interagency review that could permit, for the first time, the export of Nvidia's advanced H200 artificial intelligence chips to China. The Department of Commerce has forwarded relevant license applications to several federal bodies for evaluation, a move that would mark a departure from the restrictive stance maintained during the Biden era. This potential reversal is generating intense debate centered on national security implications.

Market analysts estimate that access to the Chinese market could generate between $25 billion and $30 billion in additional annual revenue for Nvidia. The review process, involving the Departments of State, Energy, and Defense, is operating under a 30-day deadline for submissions. While a government official emphasized to Reuters that this is not a mere formality, the final decision rests with President Trump himself.

According to reports, Nvidia is already preparing to ramp up H200 production in anticipation, with initial orders from China reportedly exceeding current capacity. The company holds some inventory but requires additional components and is coordinating production schedules with suppliers. Official licenses and specific details regarding a proposed 25% revenue-sharing fee have yet to be finalized.

A Contentious Policy Reversal

In early December, President Trump announced an intention to allow sales of H200 chips to China, contingent on the 25% fee. The H200, while less powerful than Nvidia's latest Blackwell generation, is considered an industry standard and has never been approved for export to China. The administration had initially contemplated authorizing a scaled-back Blackwell variant before settling on the H200.

The proposed policy faces substantial criticism from security experts:
* Chris McGuire, a former White House security advisor, labeled the potential export a "significant strategic error."
* He stated these chips are "the only thing holding China back in AI development" and expressed doubt that the reviewing agencies could confirm compatibility with U.S. national security interests.

Administration officials counter this view. AI czar David Sacks argues that allowing the export would deter Chinese competitors, such as Huawei, from accelerating their own development of cutting-edge technology even more aggressively.

Market Confidence Amidst Uncertainty

On December 15, investment bank Bernstein reaffirmed its "Outperform" rating on Nvidia, setting a price target of $275. Analyst Stacy Rasgon underscored the company's technological lead, noting it remains roughly two years ahead of Google's TPU program. Bernstein's analysis describes Nvidia as offering "the best hardware platform for cloud AI infrastructure."

The coming weeks are critical. Key factors include the official licensing decision, the final structure of the revenue-sharing agreement, and Nvidia's quarterly results due in late February. The company has already set high expectations with a revenue forecast of $65 billion for the fourth quarter of fiscal year 2026.