The U.S. administration under President Donald Trump has initiated a high-level review of potential sales of Nvidia’s H200 AI chips to China, signaling a major shift in U.S. technology export policy. Sources familiar with the process said the review could lead to the first shipment of these advanced artificial intelligence processors to China, following Trump’s pledge earlier this month to allow the sales while collecting a 25% U.S. government fee on the transactions.

Background: The Nvidia H200 Chips

The Nvidia H200 is the company’s second-most powerful AI chip, widely used in machine learning, data centers, and advanced computing applications. While slower than Nvidia’s current flagship Blackwell chips, the H200 remains a critical technology in AI research and commercial deployment. Historically, sales of these chips to China were prohibited under previous U.S. administrations due to national security concerns.

The Trump administration argues that allowing controlled sales of the H200 could help U.S. firms maintain technological dominance by diverting demand from Chinese chipmakers and slowing Beijing’s AI development.

Review Process and Interagency Oversight

The U.S. Commerce Department, which regulates exports, has sent license applications for H200 chip sales to the State, Energy, and Defense Departments for review. Each agency has 30 days to provide feedback, although the final decision rests with the president.

An administration official emphasized that the review will be thorough and detailed, rather than a routine procedural step. The move marks the first known interagency licensing review for advanced Nvidia AI chip exports to China.

Controversy and Security Concerns

The proposal has drawn criticism from experts and lawmakers concerned that the chips could enhance China’s military capabilities and erode U.S. advantages in artificial intelligence. Chris McGuire, a former National Security Council official, described the sale as a “significant strategic mistake” and warned it could bolster China’s AI development, which he said remains restricted by lack of access to advanced processors.

The Trump administration, however, contends that strategic controlled sales will discourage Chinese competitors, including Huawei, from attempting to close the technological gap with Nvidia and AMD.

Policy Shift from Previous Administrations

The review represents a departure from Biden-era restrictions, which prohibited advanced AI chip sales to China and other nations potentially acting as intermediaries. Under Trump’s first term, restrictions on Chinese access to U.S. technology were strictly enforced to prevent the transfer of intellectual property and military-use technologies.

While Trump had initially proposed allowing sales of Nvidia’s Blackwell chips, the administration decided instead to approve only H200 chip exports, reflecting a more cautious approach while still opening China to advanced AI technology.

Implications for AI and Global Technology Markets

The approval of H200 shipments could reshape the global AI hardware market, providing Chinese companies access to critical AI processing capabilities for the first time. Nvidia reportedly considered increasing production of the H200 after initial Chinese orders exceeded current capacity.

The review is closely watched by industry analysts, investors, and policymakers, given the strategic importance of AI chips in economic competitiveness and national security.