Nvidia finally gets the green light to ship H200 chips to China, but the US government is taking a 25% cut of the sales.

There is a major development in the tech world today. The US Department of Commerce has officially cleared Nvidia to start shipping its powerful H200 chips to customers in China. But, as usual, there are strict conditions attached to this deal.

According to reports from Semafor and CNBC, these chips can only go to "approved customers" that have been properly vetted. On top of that, the American government isn't doing this for free—they are taking a massive 25% cut from all these sales.

Old Tech or New Tech?

Here is the catch regarding the technology itself. While the H200 is a beast compared to the H20 chips Nvidia previously made just for the Chinese market, China won't be getting the brand-new stuff off the production line.

Reports indicate that Nvidia is only allowed to send H200 units that are roughly 18 months old. So, while it is an upgrade, it is not exactly the cutting-edge hardware currently driving AI in Silicon Valley.

Nvidia Reaction

Nvidia seems quite pleased with the arrangement. A spokesperson for the company told TechCrunch that they "applaud President Trump’s decision."

They framed it as a win for American industry, saying that selling these chips to vetted commercial customers strikes a "thoughtful balance" that supports high-paying manufacturing jobs back home in the US.

The Political Drama

This decision didn't just fall out of the sky. It comes barely a week after Commerce Secretary Howard Lutnick made it clear that the final say on these exports rested squarely with President Donald Trump.

However, not everyone in Washington is happy about this. In fact, this move goes directly against what many in Congress have been fighting for. Just this month, Senators Pete Ricketts (Republican) and Chris Coons (Democrat) introduced the "SAFE Chips Act."

Their bill was designed to block the export of advanced AI chips to China entirely for at least 30 months. With the Trump administration now opening the door for H200 sales, it is unclear if lawmakers will still try to push that bill forward for a vote.

A Shift in Policy

President Trump’s stance on this issue has been a bit of a rollercoaster. Back in April, his administration slapped licensing requirements on chip companies. By May, they scrapped a Biden-era rule that would have regulated these exports differently.

During the summer, the government hinted that exports could resume if they got a 15% cut of the revenue, using chips as a bargaining chip in trade talks. Now, that cut has seemingly jumped to 25%.

The China Factor

The timing here is interesting because the market in China has been tricky lately. Back in September, China’s internet regulator actually banned domestic companies from buying Nvidia chips. This forced local tech giants to rely on homegrown alternatives from Huawei and Alibaba.

Despite that tension, it seems the diplomatic channels are open. On Monday, President Trump took to Truth Social to claim that Chinese President Xi Jinping "responded positively" to the news about the H200 chips.