In a significant shift in U.S. technology export policy, the Trump administration has moved to allow the sale of advanced AI chips to China, a market that has been heavily restricted over national security concerns. The decision, which centers on Nvidia's H200 processor, introduces a novel financial arrangement and reignites the debate over balancing economic interests with technological supremacy.
Key Chip Models in the U.S.-China Export Context
- Nvidia H200: The chip approved for sale to approved customers in China under the new policy. It is an advanced AI processor but not the company's latest generation.
- Nvidia Blackwell: Nvidia's most advanced AI chip architecture currently. Its sale to China remains prohibited.
- Nvidia Rubin: Nvidia's upcoming next-generation AI chip architecture. Its sale to China is also not part of the new deal and remains restricted.
- Nvidia H20: A deliberately less powerful ("degraded") chip previously approved for the Chinese market. It was reportedly rejected by many Chinese buyers for lacking sufficient performance.
President Trump Announces Policy Shift on Chip Exports
President Donald Trump announced on December 8, 2025, via a post on Truth Social that his administration would permit Nvidia to sell its H200 artificial intelligence chips to "approved customers" in China. He stated that he had personally informed Chinese President Xi Jinping of the decision, claiming Xi "responded positively." The move represents a partial relaxation of the stringent export controls that had barred Nvidia from selling its most powerful chips, like the Blackwell and upcoming Rubin architectures, to Chinese entities. Trump framed the policy as a win for American economic interests, asserting it would "support American Jobs, strengthen U.S. Manufacturing, and benefit American Taxpayers."
Key Political and Legislative Context
- SAFE CHIPS Act: A bipartisan bill sponsored by Sen. Pete Ricketts (R) and Sen. Chris Coons (D), unveiled the week prior to Trump's announcement. It aims to restrict executive actions that would loosen chip export controls to China.
- Next Deadline (U.S. TikTok Ban): December 16, 2025. Cited as an example of Trump unilaterally extending enforcement deadlines on bipartisan legislation.
The 25% Revenue Deal and National Security Conditions
A cornerstone of the new policy is a direct financial arrangement between the U.S. government and the chipmakers. President Trump stated that Nvidia will pay the U.S. government 25% of the revenue from H200 chip sales to China. This follows a reported precedent set in the summer, where Nvidia and AMD agreed to a 15% revenue share in a similar, though legally ambiguous, quid pro quo deal. Trump indicated the sales would proceed "under conditions that allow for continued strong National Security," though specific safeguards were not detailed. The Commerce Department is tasked with finalizing these details and vetting the "approved customers," a process that will also be extended to other American chip companies like AMD and Intel.
Reported Financial Terms
- New H200 Deal: Nvidia to pay the U.S. government 25% of revenue from H200 chip sales to China.
- Previous Summer Deal: Nvidia and AMD reportedly agreed to give the U.S. government 15% of revenue from chip sales to China, in an arrangement described as a "bizarre quid pro quo" by the Financial Times.
Industry Reaction and the Push from Nvidia's Leadership
Nvidia publicly applauded the decision, issuing a statement that it would support domestic manufacturing and strike a "thoughtful balance" on economic and national security priorities. The approval underscores the considerable influence of Nvidia's founder and CEO, Jensen Huang, who has cultivated a close relationship with the Trump administration. Industry analysts and the Financial Times have noted that such direct revenue-sharing agreements between private companies and the government are virtually unprecedented and raise complex legal questions. The announcement provided a slight boost to Nvidia's stock in after-hours trading, reflecting market optimism about regaining access to a critical market.
Geopolitical Context and Congressional Pushback
The decision arrives amid ongoing geopolitical tension and a rare area of bipartisan agreement in Congress: opposing Chinese technological advancement. Just last week, a bipartisan bill dubbed the SAFE CHIPS Act was unveiled by Republican Senator Pete Ricketts and Democrat Chris Coons, aiming to restrict any executive efforts to loosen export controls. Critics of the policy shift, echoing concerns from the prior Biden administration, argue that supplying advanced chips could accelerate China's AI capabilities, posing a long-term national security risk. However, proponents, including figures like David Sacks, Trump's AI and crypto advisor, argue that making China dependent on U.S. technology is a more effective strategy than an outright ban.
The Road Ahead and Unresolved Questions
While announced by the President, the policy must still be formally enacted by the Commerce Department's Bureau of Industry and Security. Given the current political climate, significant internal resistance is not expected. The move also resolves a commercial impasse; Chinese buyers had largely sidelined Nvidia's previously approved, less powerful H20 chip, deeming it insufficient for their needs. By allowing the more capable H200, the U.S. aims to capture valuable market share while extracting a direct financial premium. As the details are finalized, all eyes will be on the specific security conditions attached to the sales and whether Congress will act to countermand the President's authority through legislation. President Trump is scheduled to visit Beijing and meet with President Xi in April 2026, where technology trade will undoubtedly be a central topic.