On Monday, President Donald Trump announced that he has informed Chinese President Xi Jinping that the United States will allow Nvidia to ship its H200 products to approved customers in China. The H200 chip is a generation behind Nvidia's latest 'Blackwell' chip, which is recognized as one of the most advanced AI chips available. Trump clarified that the 'Blackwell' chip would not be included in this agreement.

This decision could result in billions of dollars in revenue for Nvidia, which is currently the most valuable company globally. The company has reported over $500 billion in orders for its top AI chips for the upcoming year, not accounting for potential sales in China. Trump also indicated that Intel, AMD, and other American firms would be permitted to sell similar chips to Chinese customers, with the Department of Commerce finalizing the details.

This announcement effectively ends a prior ban on the sale of AI chips from U.S. companies to China. Trump stated on Truth Social that the U.S. government would receive a 25% share of the sales from the approved chips, an increase from a previously announced 15%. However, it remains uncertain whether China will accept these imports, as the Chinese government previously declined to purchase an older generation of Nvidia chips, known as the H20.

In his social media post, Trump noted that President Xi responded positively to the news. Nvidia expressed support for the decision, stating that it would allow the American chip industry to compete and support high-paying jobs and manufacturing domestically. The company described the approval of H200 sales to vetted commercial customers as a balanced approach beneficial for the U.S.

Nvidia CEO Jensen Huang has been advocating for the ability to sell chips to China for several months. However, Trump's approval does not guarantee that the issue is resolved, as a bipartisan group of lawmakers in Congress has raised significant concerns regarding the sale of American AI chips to Chinese customers. Some lawmakers, such as Senator John Kennedy (R-La.), have expressed skepticism about Huang's motivations, suggesting that his interest lies in financial gain rather than national security. Other senators, including Mike Rounds (R-SD), have indicated that discussions on this topic are necessary.

Senator Pete Ricketts (R-NE) emphasized the importance of denying Beijing access to these AI chips for national security reasons. In response to the evolving relationship between the U.S. and China, recent developments have included China increasing its purchases of American soybeans and allowing exports of rare earth minerals to the U.S.

Following the announcement, Nvidia's stock rose nearly 3% in after-hours trading.