The United States Commerce Department has approved the sale of Nvidia's H200 artificial intelligence chips to approximately ten Chinese companies including technology giants Alibaba, Tencent, ByteDance, JD.com, and hardware manufacturer Lenovo, according to multiple reports from Reuters and CNBC. Each approved buyer is permitted to purchase up to 75,000 chips under the licensing terms, representing a potential multibillion-dollar deal that would mark Nvidia's return to the Chinese market after years of export restrictions effectively shut it out.
The clearance came as Nvidia CEO Jensen Huang joined a White House delegation to Beijing during the Trump-Xi summit this week, raising hopes that the landmark diplomatic meeting might finally unlock the stalled chip trade between the two nations. Huang traveled with President Trump aboard Air Force One from Alaska to China, underscoring the strategic importance Washington places on the semiconductor industry's role in broader economic negotiations. The H200 chip, which is significantly more powerful than the downgraded models China was previously allowed to purchase, is designed for training and running large-scale artificial intelligence models.
However, despite the American regulatory approval, not a single chip has been delivered, according to three people familiar with the matter cited by Reuters. Chinese firms have pulled back from completing purchases after receiving guidance from Beijing, which appears to be using the chip deals as leverage in its own negotiations with Washington over trade tariffs and technology transfer conditions. The standoff has left Nvidia and its Chinese customers in an uncomfortable position, with regulatory permission granted on the American side but political obstacles preventing transactions from the Chinese side.
The situation highlights the increasingly complex dynamics of the global semiconductor supply chain, where advanced chips have become a central bargaining tool in superpower relations. Nvidia, which once commanded roughly 95 percent of the Chinese AI chip market before export controls decimated its sales, stands to recover significant revenue if the deals eventually proceed. Analysts estimate that clearing all approved orders could generate between 10 and 15 billion dollars in sales for the company, providing a substantial boost to an already dominant position in the global AI hardware market.
Market reaction was cautiously optimistic, with Nvidia shares gaining 4.4 percent on Thursday before the broader market pullback on Friday. Industry observers noted that while the regulatory clearance represents meaningful progress, the ultimate outcome depends on political decisions in both Washington and Beijing that remain deeply uncertain. The episode underscores how artificial intelligence technology has become entangled in geopolitical competition, with companies like Nvidia caught between government policies that simultaneously promote and restrict their most important business opportunities.
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