Nvidia’s campaign to sell AI chips to China is finally paying off

Jensen Huang is sure to have a lot of fun in China this week. the CEO of Nvidia He was spotted going for a leisurely bike ride and wandering around a fresh fruit stall in Shanghai, as well as enjoying a beef hot pot at an unassuming restaurant in Shenzhen.

Carefree touring isn’t just about good optics. Hwang has real reason to feel optimistic: his long-standing pressure campaign in Washington is finally paying off. As Huang walked around China, there were many people News outlets It was reported that Beijing has agreed to sell hundreds of thousands of powerful Nvidia H200 AI chips to Chinese companies.

According to Reuters, China He agreed to let ByteDance, Alibaba and Tencent will purchase more than 400,000 of the chips in total under conditional licenses granted during the Nvidia CEO’s visit. More approvals are expected in the coming weeks. (Nvidia and the technology companies did not immediately respond to requests for comment.)

The so-called chip sales are an amazing icing on the cake American policy coup During the past year. Under the Biden administration and the United States She tightened sharply Export controls on advanced AI chips have blocked the sale of models like the H200 to Chinese customers due to national security concerns. The restrictions were meant to limit Beijing The ability to develop Powerful artificial intelligence systems with military or other sensitive applications.

But under President Trump, a different logic has prevailed — promoted by Hwang, AI in the White House, and crypto czar David Sachs. They argued that allowing China access to some American AI chips is better than ceding such a large and important market entirely to Chinese chipmakers, both from an economic standpoint and because it would theoretically keep Chinese companies dependent on American technology.

In recent internal discussions, White House officials have also justified H200 sales by pointing to… Smuggling continues From advanced chips to China, which they say proves U.S. restrictions have been ineffective, according to two people familiar with the matter. Officials stress that allowing limited, regulated sales is better than a murky gray market that gives US authorities little insight into where the chips might eventually end up.

The White House did not immediately respond to a request for comment.

It’s not just Huang and the Trump administration that are likely to walk away happy here. By allowing domestic companies to buy H200 chips in limited quantities, Beijing has the opportunity to achieve two strategic goals at once, says Samuel Bresnik, a research fellow at the Georgetown Center for Security and Emerging Technology.

China’s local tech champions can now access the computing they desperately need to train powerful, near-frontier AI models on par with the latest offerings from OpenAI and other US labs. But by tightly controlling who can buy Nvidia hardware, Beijing is helping to ensure demand for Huawei chips remains high, and there are still strong incentives for companies to continue building China’s domestic semiconductor ecosystem.

This result is “excellent evidence that David Sachs’ idea of ​​keeping China addicted to American technology is not the way things are going to work,” Bresnik says. “I see this as evidence that China is not entirely comfortable with the idea of ​​allowing Nvidia to sink its booming chip industry.”

But the real damage may come from the knockout blow in Washington. For years, policymakers have sent mixed signals about what the United States wants to achieve with controls on chips, and China has been watching closely. “The worst thing we can do is just move back and forth,” Bresnik says. “We have already given China the imperative to run its own chips while also giving them access at the same time.”

This is an edition of Ziyang and Louise Matsakis‘ Made in China newsletter. Read previous newsletters here.