In a significant development for the technology sector, advanced Nvidia H200 AI chips have received clearance from the Department of Commerce for shipment to China. This decision, initially reported by Semafor, allows Nvidia to export these powerful chips to approved customers within the country, with the U.S. government securing a 25% cut from these sales, as reported by CNBC.

The H200 chips represent a substantial technological leap over the H20 chips, which Nvidia had specifically developed for the Chinese market. However, the export approval comes with a caveat: Nvidia will only be permitted to send H200 units that are approximately 18 months old. An Nvidia spokesperson conveyed the company's approval to TechCrunch, stating, “We applaud President Trump’s decision to allow America’s chip industry to compete to support high paying jobs and manufacturing in America. Offering H200 to approved commercial customers, vetted by the Department of Commerce, strikes a thoughtful balance that is great for America.”

This announcement follows closely on the heels of U.S. Commerce Secretary Howard Lutnick's statement a week prior, indicating that the decision regarding H200 chip exports to China rested with President Donald Trump. The move, however, stands in stark contrast to prevailing Congressional concerns surrounding national security. Republican Senator Pete Ricketts of Nebraska and Democratic Senator Chris Coons of Delaware had previously introduced the Secure and Feasible Exports Act (SAFE) Chips Act on December 4. This proposed legislation aimed to impose a 30-month ban on the export of advanced AI chips to China, requiring the Department of Commerce to deny any such export license. The future of this bill, particularly after the Trump administration's green light for H200 sales, remains uncertain.

President Trump's policy on advanced AI chip exports to China has exhibited a fluctuating stance. While Congress has consistently expressed bipartisan concerns about sending advanced AI chips to China, the Trump administration has previously taken varying actions. In April, chip companies like Nvidia were hit with licensing requirements for shipments to China. This was followed by the formal rescission in May of a Biden administration diffusion rule that would have regulated AI chip exports. Over the summer, the U.S. government hinted at allowing chip exports to China, provided the government received a 15% revenue share, positioning chips as a bargaining tool in trade negotiations with Beijing.

Despite these shifting policies, the market for U.S.-developed chips in China faced challenges. In September, China’s internet regulator, the Cyberspace Administration of China, implemented a ban preventing domestic companies from purchasing Nvidia's chips. This led Chinese firms to increasingly rely on less advanced domestic alternatives from companies like Alibaba and Huawei. Amidst these developments, President Trump stated on Truth Social that Chinese President Xi Jinping had “responded positively” to the latest news concerning the H200 chips. This story was updated on December 8 upon confirmation of the proposed decision.