• Trump announces Nvidia can sell H200 chips to approved Chinese customers.
• The U.S. will receive a 25% cut from sales to China.
• Decision comes after discussions with China's President Xi Jinping.

U.S. President Donald Trump announced on December 8 that he will allow Nvidia to export its advanced H200 artificial intelligence (AI) chips to approved customers in China, marking a significant policy shift from the more restrictive Biden administration. In a post on Truth Social, Trump stated that this decision aims to support American jobs and manufacturing, while still ensuring "continued strong National Security," according to Reuters and South China Morning Post.

In his message, Trump mentioned that he informed Chinese President Xi Jinping about this agreement, to which Xi "responded positively." Moreover, he indicated that 25% of the revenue from these chip sales would be paid to the United States, without detailing the mechanism for this payment, according to The Hill and Channel News Asia.

This policy will also extend to other U.S. semiconductor firms like AMD and Intel, as Trump's administration seeks to create a competitive landscape while addressing national security concerns linked to military applications of AI technology. As a significant item of this arrangement, Nvidia's advanced Blackwell chips and forthcoming Rubin processors will remain restricted for export to China, reports Business Insider and BBC.

In lieu of the announcement, Nvidia witnessed a positive response in its stock, reflecting investor sentiment regarding the lifting of restrictions on chip sales to China. The approval of H200 chips, which reportedly hold a performance advantage of nearly six times over the previous legally exportable AI semiconductor, is expected to bolster the capabilities of Chinese AI labs, according to Le Monde and CBS News.

As the situation develops, experts voice mixed opinions on the implications of the H200 chip sale, highlighting concerns that enabling sales of advanced AI chips to China could enhance Beijing's military capabilities, as voiced by critics in Congress, including Senator Elizabeth Warren. Such concerns stem from the potential use of NVIDIA technology for military applications, a fear that has historically prompted export limits under both administrations, as noted by Reuters and CBS News.