• The US government has approved the export of Nvidia's H200 AI chips to China.
• The export is subject to strict conditions including third-party verification and limits on shipment quantities.
• Chinese tech firms have reportedly placed orders exceeding Nvidia's supply capacity.
• Concerns persist regarding the chips' potential military applications and impact on US technological advantage.
• The policy marks a shift from previous restrictions imposed by the Biden administration.

The US government has formally approved sales of Nvidia's H200 artificial intelligence chips to China, signaling a significant policy shift under the Trump administration. These sales will occur under strict conditions that include third-party verification of technical capabilities and limitations on how much can be shipped to China, which cannot exceed 50% of total sales made to US customers, according to South China Morning Post and Channel News Asia.

Chinese technology companies are eager to secure these chips, with reported orders exceeding 2 million units priced around $27,000 each, far surpassing Nvidia's inventory of 700,000 chips. However, the Chinese government has issued guidance stating that approvals for such purchases would only be granted under specific circumstances, such as for research purposes, signifying a cautious approach to American technology imports, as reported by India Times and BBC.

The new export policy was announced amidst concerns from US officials that these chips could enhance China's military capabilities. The processing units are crucial for training AI models, which have become increasingly important in the global technology landscape. Nvidia's CEO Jensen Huang has actively lobbied for access to the Chinese market, arguing the need for competitive balance in AI technology, as highlighted by India Times and Channel News Asia.

Despite the approval for H200 chip sales, Nvidia's most advanced chips, including the latest Blackwell processor, remain barred from export to China, reflective of ongoing concerns over the competitive edge in AI development. This regulation contrasts sharply with the restrictions set by the previous administration, underlines the ongoing struggle for leadership in AI between the US and China, according to South China Morning Post and BBC.