In his typical back and forth style, President Trump announced on Dec. 8 that he had given permission to Nvidia to sell its second-most-advanced chip, the H200, to China. This after blocking in April of Nvidia’s H20, the company’s China specific product, following Biden’s restriction of its H100. In July, Trump approved the sales of the same H20 but added a licensing requirement.
But the July reversal was a bit late. The earlier bans prompted the Chinese government to increase investment in self-reliance. It also discouraged companies from buying the H20 for its alleged “backdoor security risks.”
The December permission for sales of a more advanced chip is surely a big win for Nvidia, and especially for its chief executive Jensen Huang, who believes the importance of the China market in maintaining America’s lead in AI. The waiving of U.S. chip export policies, however, also reflects the differences within and outside the Trump administration as to which approach advances America’s national security: to slow China’s AI development or to make China dependant on America’s chip technology.
To the new twist in U.S. chips export policy, China’s Foreign Ministry spokesperson simply said that China had noticed the report and as always held that the two countries should strive for a win win through cooperation. Chinese netizens, however, have more to say. Here is a sample of their posts on Weibo hashtag #Nvidia has been granted permission to sell H200 to China#
JL6688: Nvidia is starting to sell its H200 to China, but why didn’t the market respond with much of a ripple? On the contrary, it is our own Moore Threads chips everyone is looking forward to—China’s robust and capable domestic chips, the true strength!
HY SYHP: As Jensen Huang said, even if the United States allows the sale the Nvidia H200 chip, it is not certain that China will buy it, as they won’t accept a castrated (constrained) version.
XLG of Flying Elephant net: Trump said on social media that Nvidia would be allowed to sell its H200 chips to China. But I believe that H200 would face the same fate as H20. China would give it a cool treatment by opening the market a little bit. Large scale sales would not be possible.
For China, several critical issues remain: 1. Nvidia is not a secure supplier. The U.S. can lift its ban of H200 to China today and ban it tomorrow. If China relies on American chips, it will never have a secure supply. 2. Nvidia chips are not safe themselves. Even American congressmen and government officials said there were backdoors built in them. Using these chips could be monitored and controlled. 3. China now can make its own chips, which mostly met the demands of China’s AI centers when it stopped buying H20 chips. There was no shortage or scarcity of chips. 4. China can use innovative technologies to integrate intelligent computing centers across the country, enabling dynamic use of computing power in a unified system, without building numerous individual centers.
In fact, there will soon be a surplus of computing power in China. To me, Nvidia selling H200 chips to China is more a one-sided wish. When China didn’t buy H20, it was more out of distrust and low demand than performance. H200 will face the same fate.
RH: If certain agencies do not oppose, I am sure there are companies that will buy Nvidia H200, especially those with foreign investment.
Big mouth insider: It was reported by Reuters that after the U.S. said it would allow Nvidia to sell its high performance H200 chips to China, ByteDance and Alibaba expressed their intent to buy Nvidia H200 and made inquiries to Nvidia about the purchase.
T’s thoughts: That it agreed to Nvidia selling its H200 chips to China is only a small change of attitude on the part of the United States, and a small part in the China-U.S. trade negotiations. This relaxation is obviously not real relaxation. It is a way to find market for Nvidia. This chip does not have high technical sophistication, and the market is also diverse, not monopolized. That means that this relaxation is not equal to H200 success in the China market, or that the Chinees companies must use this chip. Unlike with soybeans, the U.S. government can’t make China buy this chip. If the Chinese companies do not accept it, then Nvidia’s efforts will be in vain.
Go the game researcher: Last month, Trump decided against Nvidia to export its flagship Blackwell chip series to us, saying that “except the U.S., no country will be allowed to own the most advanced AI chips.” This week, Trump approved the export of Nvidia H200 chips to China. Although not the most advanced chip, it is at a good level of performance, six times that of the currently imported H20, a target that leading domestic companies are trying to reach.
What may look like Trump contradicting himself is, in fact, one stone killing multiple birds: One. It makes sure we never get the most advanced chips to fully develop our technology; Two. It will make money from sales of H200 chips to China, and the Trump administration gets its 25% cut; Three. Let domestic companies buy these chips, reduce their motivation for independent research and development, so the catching up is slowed down.
Alpha’s military: Honestly, even though H200 AI chip is more advanced than the castrated H20, we Chinese do not want such second-hand goods. Nvidia’s most advance Blackwell and soon to be launched Robin are still banned from sales to China.
Without us Chinese picking up their second-hand goods, I believe this H200 will suffer the same fate as H20. The reason that the U.S. now allows sales of H200 to China is that China now can manufacture chips of comparable performance levels. If we have our own chips of sufficient performance, why should we buy from you the U.S.? Do we enjoy chokehold by the U.S.?
PPTweet: Nvidia was approved to sell to China H200 chips. With the advanced Nvidia chips returning to the China market, it must be very good news in improving the domestic computing power! This analysis from Weibo smart search, however, is very insightful: “When they can ban, they ban. When they can’t ban, they dump—both are tactics of a strategic game. The ultimate defense is independent development of core technologies.”
Letting money in: I did a little search and realized that there is indeed demand for this Nvidia H200 chip. Even though domestic chips are progressing fast, they still need some time. Can anyone predict how long before we can achieve chips independence?
No return: The ban of Nvidia H200 sales to China is lifted. Old Huang has won big! The U.S. takes advantage of the generational gap, allows sales of last generation of advanced chips and at the same time takes 25% of commission. H200 is six times better, but still behind the newest Blackwell. This move helps maintain Nvidia’s market dominance and reaps profits as well.
Fishing minister: Nvidia is, in the end, coming. Old Trump confirmed it. What does it mean? It means that the U.S. has finally seen the reality, which is that relying on blockade to prevent China’s development is impossible. It is best to do business and make money together. Regarding the sales of H200, we have seen repeated news of ban and lifting of ban. This time, the lifting should be real. We will see if domestic companies buy them. But isn’t it good news for semiconductor sector if the ban is really lifted?
GHP: With the news that the U.S. will share 25% of Nvidia chips sales to China, many people’s first reaction is: the U.S. government is actually taking a cut of 25% of an American company’s export sales, with an initial ask of a staggering 25%, and that the U.S. Department of Commerce is working on details to apply the same arrangement for AMD, Intel and other American AI chips companies?
Brother Z in stock market: Nvidia finally can sell its AI chips to China again. But it must pay a protection fee, giving $25 to the U.S. government for every $100 of sales. Still, Old Huang must be having a sigh of relief. The ban must have been hard for him, losing so much of the China market. Even though he will have to give a big pound of flesh, to be able to sell is so much better than making no profit at all! Old Trump is also quite clever with this move. By letting Nvidia make money on the one hand, letting the government take a cut on the other, in addition, allowing sales only to approved customers, he got the best of both worlds. However, the cut of 25% is really steep. In the end, the cost will be transferred to customers. To put it simply, this is business. Americans exchange technology for money, and China pays money for chips. Each side made concessions, the game is far from over.
Sister showing wealth: Jensen Huang has said recently in an interview as reported that China’s AI will leave all others behind. First. Nine out of ten world’s leading technology institutions are in China; Two. 50% of the world’s AI developers are Chinese; Three. China’s AI ecosystem is vibrant, resourceful, and creative, owning 79% of patents of last year. With such a vibrant and large market, if American companies are not participating in, they will lose the opportunity forever and can only become buyers instead of sellers. That’s why Old Huang is deeply worried.
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