By Britney Nguyen
Some analysts see ample opportunity now that the U.S. plans to allow chip sales to China again, but others worry about further geopolitical roadblocks
President Donald Trump, seen at the White House with Nvidia CEO Jensen Huang on April 30, said Monday that he will allow Nvidia to sell its H200 chips to some customers in China.
After months of twists and turns, Nvidia may be able to start selling its chips in China again, but the market is shrugging off the news.
Some analysts see billions of dollars’ worth of opportunity every quarter if all goes according to plan, but others on Wall Street are less certain about whether the company will be able to capture meaningful China business in a fraught geopolitical landscape.
Nvidia’s stock (NVDA) slipped 0.3% on Tuesday despite a social-media post from President Donald Trump on Monday afternoon in which he said he would allow shipments of the company’s H200 chip to China, provided that Nvidia gives the U.S. government a 25% cut of sales.
While China has its own budding chip companies, those might only be able to serve about 20% of the country’s total market for chips, while Nvidia, Advanced Micro Devices (AMD) and other global chip makers would need to supply the remaining 80%, UBS analyst Timothy Arcuri wrote in a note to clients.
That means that upon receiving government approval, Nvidia “may return to shipping” between $5 billion and $10 billion of its chips per quarter, Arcuri said.
China was once a hot topic for Nvidia investors and a driver of meaningful stock moves. But Tuesday’s muted share-price action suggests to Arcuri that “many investors view this as a less important catalyst” than the debate over how Nvidia’s graphics processing units will fare as custom chips from rivals catch on.
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TD Cowen analyst Joshua Buchalter said that while allowing H200 sales is “clearly a tailwind,” he is “skeptical” that investors will give much weight to China revenue for Nvidia after the back-and-forth decision-making by the Trump administration.
There’s also the concern that the Chinese government and local companies will not want to buy older generations of chips, Buchalter said.
The Financial Times reported on Tuesday that the Chinese government is looking to limit access to H200 chips as the country aims to build up a self-reliant chip industry.
Chinese regulators could require buyers to go through an approval process that includes submitting purchasing requests outlining why homegrown chips are not sufficient, the Financial Times reported, citing unnamed people familiar with the matter.
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TD Cowen technology, media and telecommunications policy analyst Paul Gallant said that the H200 chips “may not be available to companies with Chinese [government] investments but will be available to other significant buyers.” Given that Trump said that he discussed the sales with Chinese President Xi Jinping, it could be that “both countries are on the same page regarding Chinese buyers of H200s,” Gallant said in a Monday note.
While he was surprised about the 25% U.S. government cut due to “real legal uncertainties around it,” Gallant said he sees Trump’s approval “as driven far more by geopolitical considerations,” since Nvidia and other U.S. tech companies make up much of global [artificial-intelligence] infrastructure. Therefore, he wrote, “we don’t view Nvidia’s new H200 licenses as at risk of withdrawal should the [government’s] 25% cut be deemed invalid at some future date.”
See more: Trump blesses China sales for Nvidia. Here’s how big the opportunity could be.
The H200 has been used by companies such as OpenAI and Meta Platforms for training advanced AI models and is a more advanced version of the reduced-capability H20 chips Nvidia designed to comply with existing export controls. However, the H200 is a generation behind the Blackwell chips that Nvidia is currently rolling out to customers and will be two generations behind the upcoming Rubin platform.
Read: Why the once-invincible Nvidia can’t save the AI trade
Nvidia said during its earning call in August that some of its China-based customers had received licenses to receive H20 shipments again but that it had not shipped any. The H20 and AMD’s MI308, which was also specially designed for China, were banned for sale to the country by the Trump administration in April. Trump later reversed the decision and said he wanted a 15% cut of the revenue for the U.S. government.
-Britney Nguyen
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12-09-25 1934ET
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