Nvidia is awaiting US government approval to sell a more powerful AI chip to China.

The U.S. Commerce Department will decide whether Nvidia can sell its H200 chip in China, in accordance with U.S. export regulations. The U.S. government previously restricted sales of Nvidia's top AI chips to China to prevent access to advanced AI technology, particularly by the Chinese military. However, this action inadvertently aided Huawei's growth in the AI accelerator sector while impacting Nvidia's sales in China.

A White House official and the Commerce Department declined to comment directly on the Nvidia issue. The administration stated that it remains "committed to securing America's global technology leadership and safeguarding our national security," echoing standard objectives.

Nvidia's H200 chip, which launched a few years ago, has more high-bandwidth memory than the H100 AI accelerator, enabling quicker data processing. Manufactured by TSMC using a 4nm process with the Hopper core architecture, the H200 is twice as powerful as the H20 GPU, Nvidia's most powerful AI chip currently permitted for export to China. Designed for Large Language Models (LLM) and high-performance computing (HPC), it has 141GB of HBM3e memory and 4.8TB/s of memory bandwidth.

In April, the Trump administration temporarily banned sales of the Nvidia H20 to China, before reversing this decision. The administration also recently approved the export of up to 70,000 Nvidia Blackwell chips, Nvidia's next-generation AI accelerators, to Saudi Arabia's Humain and the United Arab Emirates' G42.

Despite discussions by President Donald Trump regarding stricter export controls on U.S. technology to China, the Commerce Department is expected to revise the U.S. chip export policy following a recent agreement between the U.S. and China. The U.S. agreed to reduce its average tariff rate on imports from China to 48% as part of the bilateral trade agreement.

Nvidia executives claim that export limitations prevent them from offering a competitive data center product in China, opening the market to international rivals without similar restrictions. The absence of Nvidia's high-end AI chips has allowed Huawei to promote its Ascend 910C AI accelerator, used for AI model training, within China. According to one analysis, Huawei's Ascend AI Accelerators hold a 79% market share in China's domestic AI accelerator market.

Gene Munster of Deepwater Asset Management noted that changes to U.S. policy on Nvidia's exports to China could increase Nvidia's projected revenue growth in China from 49% to 72%. Munster suggests that even with restricted access to China, revenue growth from China could reach 60% this year, and potentially 75% if H200 exports resume. Nvidia is currently valued at $4.35 trillion.