The Nvidia logo and Chinese flag can be seen in this image from August 27, 2025.
Given Ruvic | Reuters
BEIJING – U.S. President Donald Trump's move to allow Nvidia to ship a more advanced artificial intelligence chip to China will significantly boost Beijing's technical capabilities, analysts say.
This signals a change in policy as the US has tightened restrictions on Chinese access to advanced semiconductors in recent years. However, the restrictions have not stopped Chinese companies like DeepSeek from finding ways to develop AI models that can compete with their U.S. rivals, often at lower operating costs.
“Computers are our greatest advantage,” Rush Doshi, an assistant professor at Georgetown University, said on the social media platform X, pointing out that China already has a lead over the United States in electricity, engineering and other fields.
“By foregoing this, we increase the likelihood that the world will rely on Chinese AI,” said Doshi, who was deputy senior director for China and Taiwan Affairs at the National Security Council under the Biden administration.
Trump said in a post on his Truth Social platform on Monday that Nvidia could supply a more advanced chip called H200 to “approved customers in China” and other countries – on the condition that the US receives a 25% discount. This is an increase from the 15% rate agreed in the summer.
He noted that Nvidia's more advanced Blackwell and Ruby chips are not part of the China deal.
“The Biden administration forced our big companies to spend BILLIONS OF DOLLARS developing “degraded” products that no one wanted, a terrible idea that slowed innovation and hurt American workers,” Trump said.
Nvidia had developed a less powerful chip called H20 to comply with US regulations, but had to stop shipments to China in April.
“This move gives China a lot of advanced AI computing power that it wouldn’t otherwise have,” said Tim Fist, director of emerging technologies at the Washington, D.C.-based think tank Institute for Progress.
“The new Chinese stack will consist of NVIDIA chips, Tencent/Baidu/Alibaba cloud, and DeepSeek/Qwen/Kimi models,” Fist said in a social media post on X, noting that these AI capabilities will then compete with U.S. rivals abroad.
The think tank released a report on Sunday saying that if Nvidia were allowed to export H200 chips, the U.S. lead over China in AI computing would shrink from about 10-fold to a maximum of five-fold next year.
The H200 can help many Chinese AI developers improve their models, making the chip “far more useful and effective” than the H20, said George Chen, partner and co-chair of digital practice at The Asia Group.
He pointed out that Trump's decision was a sign of improving relations between Washington and Beijing, as the US president plans to visit China in April. Nvidia “has a good window to sell H200, but it won’t be… forever.”
China is striving for technological independence
Given U.S. restrictions, China has sought to reduce its dependence on foreign technology. The country's upcoming five-year plan, which comes into effect next year, underscores that policies and government resources will increasingly flow into homegrown chips and AI applications.
According to the company, Chinese telecommunications giant Huawei announced in September its multi-year plans to develop chips that would have the largest computing power in the world when clustered on a large scale.
“China will continue to do everything in its power to reduce its dependence on U.S. AI chips, even as it continues to have access to U.S. chips,” Chris McGuire, senior fellow for China and emerging technologies at the Council on Foreign Relations, said on
Trump's decision “eliminates the U.S.'s greatest advantage over China in AI,” McGuire said, calling the move “a fundamental shift in U.S. policy and a significant strategic mistake.”
The White House Office of Science and Technology Policy did not immediately respond to a CNBC request for comment.
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Nvidia CEO Jensen Huang has often spoken publicly about China's improved AI capabilities and called on the U.S. to allow the company to sell its products to the country.
So far, U.S. restrictions have not completely cut off China from modern ships.
Separately, the U.S. Department of Justice said Monday that it had seized more than $50 million worth of advanced graphics processing units destined for China and other restricted areas. The press release said individuals arrested and “exported and attempted to export” Nvidia H100 and H200 chips worth at least $160 million between October 2024 and May 2025.
Nvidia shares rose 2% in after-hours trading following Trump's post. Chinese AI chip names Moore Threads rose more than 2% and Cambricon rose over 1% in the mainland market, while SMIC shares fell more than 2% in Hong Kong trading.