An NVIDIA AI computing card photographed in Hangzhou, Zhejiang Province, China on December 9, 2025.
Photo | Future Publishing | Getty Images
BEIJING – U.S. President Donald Trump’s move to allow Nvidia to ship more advanced artificial intelligence chips to China will significantly boost China’s technological capabilities, analysts say.
This signals a shift in policy after the United States has tightened restrictions on China’s access to advanced semiconductors over the past few years. But the regulations haven’t stopped Chinese companies like DeepSeek from finding ways to build AI models that rival their U.S. peers, often at lower operating costs.
“Computing is our main advantage,” Rush Doshi, an assistant professor at Georgetown University, said on social media platform X, noting that China already has advantages over the United States in power, engineering and other fields.
“Abandoning this increases the likelihood that the world will rely on Chinese AI,” said Doshi, who served as deputy senior director for China and Taiwan affairs at the National Security Council under the Biden administration.
President Trump said in a post on his Truth Social platform on Monday that Nvidia could ship the more advanced chip, called the H200, to “authorized customers in China” and other countries, provided the U.S. received a 25% tax break. This is higher than the 15% agreed in the summer.
He noted that Nvidia’s more advanced Blackwell and Rubin chips are not included in the deal with China.
“The Biden administration forced our nation’s largest companies to spend billions of dollars manufacturing ‘degraded’ products that no one wanted. This is a terrible idea that slows innovation and hurts American workers,” Trump said.
Nvidia had been developing an inferior chip called H20 to comply with U.S. regulations, but had to stop shipping to China in April.
“This move gives China a huge amount of advanced AI computing power that it wouldn’t have had otherwise,” said Tim Fist, director of emerging technologies at the Washington, D.C.-based think tank Institute for Progress.
“The new Chinese stack will be NVIDIA chips, Tencent/Baidu/Alibaba Cloud, and the Deep Seek/Qwen/Kimi model,” Fist said in a social media post about X, noting that these AI capabilities will compete with U.S. rivals overseas.
The think tank released a report on Sunday that says if NVIDIA is allowed to export its H200 chips, the US’ advantage over China in AI computing next year will shrink from about 10 times to as much as 5 times.
The H200 will help many Chinese AI developers improve their models, making the chip “much more convenient and effective” than the H20, said George Chen, partner and co-chair of the Asia Group’s digital practice.
He noted that President Trump’s decision is a sign of improving U.S.-China relations, as the U.S. leader is scheduled to visit China in April. Nvidia “has a good time frame to sell the H200, but it won’t be forever.”
China aims for technological independence
In the face of U.S. regulations, China is trying to reduce its dependence on foreign technology. The country’s next five-year plan, which starts next year, highlights that policy and government funding will increasingly focus on domestically produced chips and AI applications.
In September, Chinese telecom giant Huawei unveiled a multi-year plan to develop chips that would have the world’s largest computing power when clustered at scale, the company said.
“China will continue to do everything it can to reduce its dependence on U.S. AI chips while maintaining access to U.S.-made chips,” Chris McGuire, senior fellow for China and emerging technologies at the Council on Foreign Relations, told X. He pointed out that China won’t make a chip better than Nvidia’s H200 until at least the fourth quarter of 2027, so it will take some time.
McGuire said President Trump’s decision “will negate the United States’ greatest advantage over China in AI” and called the move “a sea change in U.S. policy and a major strategic mistake.”
The White House Office of Science and Technology Policy did not immediately respond to CNBC’s request for comment.
Subscribe now
Nvidia CEO Jensen Huang has frequently spoken publicly about China’s growing AI capabilities and has called on the United States to sell his company’s products there.
U.S. regulations have so far not completely cut off China from advanced chips.
Separately, the U.S. Department of Justice announced Monday that it had seized more than $50 million in advanced graphics processing equipment destined for China and other restricted territories. The arrestees “exported and attempted to export” at least $160 million worth of Nvidia H100 and H200 chips between October 2024 and May 2025, the statement said.
Nvidia stock rose 2% in after-hours trading following President Trump’s post. In the mainland market, Chinese AI chip names Moore Threads rose more than 2% and Cambricon rose more than 1%, while SMIC shares fell more than 2% in Hong Kong trading.
