The U.S. Commerce Department has formally adjusted its export policy, creating a conditional pathway for Nvidia to sell certain advanced artificial intelligence chips to China. The change, confirmed on Tuesday, follows a policy shift announced last month by President Donald Trump.
Under the new regulations, Nvidia may be permitted to sell its H200 AI chip to Chinese customers, moving from a “presumption of denial” to a case-by-case review policy. This is contingent on specific conditions, including verification of “sufficient” supply for U.S. needs. Sales of Nvidia’s most advanced processors to China remain prohibited.
This decision marks a significant reversal of the previous administration’s policy, which had heavily restricted advanced AI chip exports over national security concerns related to potential Chinese military applications. President Trump announced in December that an agreement had been reached with Chinese President Xi Jinping, which included the U.S. government receiving a 25-percent share of the sales revenue from these exports.
However, the market response in China remains uncertain. Beijing has reportedly been encouraging its domestic technology firms to prioritize locally produced chips. According to a report from The Information, some Chinese companies have been notified that government approval for purchasing H200 chips would be granted only in special cases, such as for university research or development labs.
**China’s Domestic Chip Advancements**
Concurrent with the U.S. policy shift, China is demonstrating significant progress in developing its own semiconductor capabilities. Nvidia CEO Jensen Huang has previously warned that China is rapidly closing the technology gap.
Highlighting this trend, Chinese AI startup Zhipu AI announced on Wednesday that it successfully used domestically produced Huawei chips to train its latest image-generation model. Zhipu described its tool as “the first state-of-the-art multimodal model to complete the entire training process on a domestically produced chip.”
The developments come as Chinese AI and chip companies see strong investor interest, reflecting growing confidence in the domestic technology sector’s ability to compete on a global scale.
