Nvidia (NVDA) Stock: Trump Pushes Forward With Controversial China Chip Review

TLDR

• Commerce Department distributed H200 chip export license applications to State, Energy, and Defense Departments
• Agencies have 30-day review period with final approval authority resting with Trump
• Sales would include 25% government fee as part of new export policy approach
• Chinese demand for H200 chips already exceeds Nvidia’s current production capacity
• Policy marks sharp reversal from Biden administration’s blanket export restrictions

The Trump administration has begun a formal inter-agency review that could authorize Nvidia’s H200 AI chip sales to China for the first time. Five sources confirmed the Commerce Department sent export license applications to multiple federal agencies this week.

NVIDIA Corporation, NVDA

The State, Energy, and Defense Departments now have 30 days to evaluate the applications under existing export regulations. President Trump retains final decision-making authority regardless of agency recommendations.

An administration official emphasized the review would be comprehensive rather than a rubber-stamp process. The Commerce Department and Nvidia have not commented on the ongoing evaluation.

Breaking From Previous Export Policy

This review follows Trump’s December announcement that he would permit H200 sales with a 25% government fee attached. The administration contends this approach maintains U.S. chipmaker competitiveness by reducing Chinese incentives to develop domestic alternatives.

The Biden administration had implemented comprehensive restrictions on advanced AI chip exports to China. Those policies cited national security risks and potential military applications.

White House AI czar David Sacks argues that allowing chip exports actually discourages Chinese competitors like Huawei from accelerating their own development efforts. This reasoning supports permitting sales from Nvidia and AMD.

The H200 represents Nvidia’s second-most powerful AI chip line. While slower than the flagship Blackwell series on many tasks, H200 chips remain widely deployed across the industry and have never been authorized for Chinese sale.

Production and Market Implications

Trump initially considered approving less-advanced Blackwell chip variants before switching to H200 authorization. The H200 serves as the direct predecessor to current Blackwell models.

Recent reports indicate Nvidia is evaluating increased H200 production capacity. Initial Chinese orders have already surpassed existing manufacturing capabilities.

Critics from both political parties have challenged the proposed sales. Chris McGuire, former Biden White House National Security Council official, described the chips as “the one thing holding China back in AI.”

McGuire questioned whether agencies could reasonably certify that exports serve American national security interests. He characterized potential large-scale shipments as a strategic mistake.

A White House spokesperson stated the administration remains focused on American technology dominance without sacrificing national security considerations. However, uncertainty remains about whether Beijing will permit Chinese companies to purchase the chips if approved.

The inter-agency review represents the first concrete step toward potential authorization. Agencies must complete their evaluations within the 30-day regulatory timeframe before Trump makes a final determination on the export licenses.

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