Nvidia (NVDA) Stock: Rises 1.72% As Trump Approves H200 Chip Sales to China Amid Security Concerns

TLDRs;

• Nvidia shares rose 1.72% after Trump authorized H200 chip exports to China.
• U.S. to receive 25% of revenue from H200 chip sales to China.
• Critics warn the move could empower China’s AI and military capabilities.
• Nvidia maintains strong demand for Blackwell chips despite China restrictions.

Nvidia (NASDAQ: NVDA) shares climbed 1.72% on Monday after President Donald Trump announced approval for the sale of the company’s high-performance H200 AI chips to China. The announcement comes after months of uncertainty regarding U.S. export restrictions and ongoing negotiations between the tech giant and the federal government.

In after-hours trading, the stock continued to gain, rising over 2%, reflecting investor optimism about renewed access to one of the world’s largest technology markets.

NVIDIA Corporation, NVDA

Trump’s approval marks a significant shift from previous policy, which had only allowed the sale of the less powerful H20 chips to China. While the H200 chips are roughly 18 months behind Nvidia’s cutting-edge Blackwell series, they remain far more capable than the H20 units and are expected to bring substantial revenue to the company. Under the new arrangement, the U.S. government will take 25% of revenue from the H200 sales, up from an initial 15%, signaling a stronger financial stake in the deal.

Strategic Advantage in the AI Race

Nvidia CEO Jensen Huang and other proponents of exporting high-performance chips argue that allowing H200 sales to China strengthens the U.S. position in the global AI race. By maintaining a role in China’s AI development, American firms like Nvidia can ensure that Chinese AI companies rely on U.S. technology, thereby giving the United States leverage in shaping industry standards and innovation pathways.

Huang has highlighted that China houses roughly half of the world’s AI programmers, making access to this market crucial for both commercial and strategic reasons. The sale of H200 chips could also counterbalance China’s domestic push to develop its own AI processors, helping U.S. companies retain influence over the global AI ecosystem.

Security Concerns and Political Backlash

Despite the potential business gains, security experts and lawmakers have voiced strong concerns. Critics, including Senator Elizabeth Warren, argue that providing China with high-powered AI chips could accelerate its technological and military ambitions, posing risks to U.S. national security.

Warren has called for swift congressional action to impose restrictions and demanded that Nvidia executives testify about the deal, citing political donations as a possible influence on the administration’s decision.

Congressional proposals such as the Secure and Feasible Exports (SAFE) Chips Act aim to block the export of advanced AI chips to China for more than two years. While Trump’s approval overrides some of these restrictions, the legislation signals ongoing scrutiny and potential future challenges for Nvidia’s China operations.

Strong Domestic Demand and Future Prospects

Even as China remains a contested market, Nvidia continues to see robust demand for its Blackwell series chips in the United States and other regions. The company has increased wafer production through partners like Taiwan Semiconductor Manufacturing Company (TSMC) and strengthened relationships with major memory suppliers, including SK Hynix, Samsung, and Micron, to support growing global demand.

While Nvidia navigates these geopolitical complexities, the company’s outlook remains positive. Revenue from China had previously accounted for a small fraction of total sales, just $2.8 billion in the last quarter, but renewed access to the market could boost future earnings. Analysts are watching closely as Washington balances commercial interests with national security, with Nvidia’s next moves likely shaping the global AI landscape.

Conclusion

Nvidia’s stock surge reflects investor optimism over the White House’s approval of H200 chip exports to China, though political and security debates are far from resolved.

As the company continues to expand its AI hardware footprint globally, navigating geopolitical and legislative hurdles will be essential for sustaining its growth and leadership in artificial intelligence.

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