Trump opens door for Nvidia in China - but both the market and Beijing shrug

"The latest: Trump is now allowing Nvidia to sell its H200 chips to China, with the U.S. government getting a 25% cut from any sales. The chips are a major upgrade from the H20, the heavily downgraded model Nvidia was forced to design under previous export rules and which China largely rejected. Trump is touting the approval of the H200 as a reversal of Biden-era policy. "The Biden Administration forced our Great Companies to spend BILLIONS OF DOLLARS building "degraded" products that nobody wanted, a terrible idea that slowed Innovation, and hurt the American Worker," Trump wrote Monday on Truth Social. Yes, but: While by far the most powerful chip Nvidia has been allowed to sell in China, the H200 is still a full generation behind Nvidia's newest Blackwell chips."

"And Beijing, intent on building up its domestic chip industry, isn't rushing to buy them. Regulators there are set to limit access to the H200s, requiring would-be buyers to explain why domestic chip options weren't sufficient for their needs, the FT reported Tuesday, citing people with knowledge of the matter. Huang himself has said he wasn't sure whether China would accept them."

"The big picture: The U.S. and China are locked in an AI race, and Nvidia - the dominant AI chipmaker - is stuck in the middle. U.S. export restrictions have locked Nvidia out of a market CEO Jensen Huang estimates at $50 billion this year and hundreds of billions by the end of the decade. Nvidia says its absence only accelerates Chinese chipmakers' progress in closing its technological lead, which it argues is a national security risk of its own."

Nvidia has been largely excluded from China by U.S. export restrictions that limit access to an estimated $50 billion market this year and hundreds of billions by decade's end. Nvidia warns its absence accelerates Chinese chipmakers and poses a national security concern. The U.S. approved sales of the H200 to China with a 25% government cut, but the H200 remains a generation behind Nvidia's Blackwell architecture. Beijing plans to restrict H200 purchases by requiring buyers to justify why domestic chips are insufficient. Market reaction has been muted and analysts remain cautious about long-term revenue upside without confirmed Chinese orders.

Read at Axios