Trump Approved Nvidia H200 Chip Sales to China, but Beijing Won’t Buy

President Donald Trump approved the sale of Nvidia’s advanced H200 artificial intelligence chips to China, but not a single chip has been sold — because Beijing has refused to let Chinese companies complete the purchases. The unusual standoff highlights the limits of U.S. leverage in the escalating technology rivalry between the world’s two largest economies.

According to the BBC, the U.S. Commerce Department gave Nvidia the green light in January 2026 to export its H200 processors to approved Chinese customers under a 25% government fee. Roughly 10 Chinese firms — including Alibaba, Tencent, ByteDance, and JD.com — were cleared by Washington to buy the chips. Yet none have been delivered.

The Impasse

During a two-day summit with Chinese President Xi Jinping in Beijing on May 14, Trump told reporters aboard Air Force One that China “chose not to” approve the purchases because “they want to develop their own” chips, according to Tom’s Hardware. U.S. Commerce Secretary Howard Lutnick made a similar point, confirming that Beijing is blocking imports to steer investment toward domestic chipmakers like Huawei.

The reality was underscored on May 21, when Nvidia reported its Q1 FY2027 earnings. CFO Colette Kress confirmed the company had “yet to generate any revenue” from H200 sales to China and was “uncertain whether any imports will be allowed into the country,” as reported by the South China Morning Post. Nvidia reported record revenue of US$81.6 billion for the quarter, up 85% year-on-year, but excluded China data center compute revenue from its outlook entirely.

A Shift in Strategy

The standoff marks a dramatic reversal from the Biden administration’s approach. Under Biden, the sale of advanced AI chips to China was banned outright over national security concerns. Trump shifted to a revenue-sharing model in July 2025, allowing controlled exports while collecting a fee — initially set at 15% and later raised to 25%.

Trump announced the policy on Truth Social in December 2025, writing that the move would “protect National Security, create American Jobs, and keep America’s lead in AI,” as Evertiq reported. Nvidia welcomed the decision, with a spokesperson saying the approach “strikes a thoughtful balance that is great for America.”

But the strategy has not played out as planned. Chinese firms initially placed purchase orders with Nvidia but later informed the company they could not follow through, reportedly after Beijing ordered tech companies to prioritize domestic semiconductors.

Why Beijing Is Holding Back

Multiple factors explain China’s reluctance to approve H200 purchases. Strategically, Beijing wants to reduce dependence on U.S. technology and build domestic chip champions like Huawei. By blocking Nvidia imports, China channels investment toward its own semiconductor companies, accelerating efforts to close the gap with American chipmakers.

There is also an element of unpredictability. Chinese firms may not trust the consistency of U.S. export policy given rapid reversals — from Biden’s ban to Trump’s approval — and Beijing may be using the standoff as leverage in broader trade negotiations.

As semiconductor analyst Austin Lyons told the BBC, while Beijing is likely concerned about domestic firms becoming over-reliant on Nvidia, local companies will be eager to secure H200 chips — at least until homegrown alternatives improve.

Conditional Approvals

There are signs the situation may evolve. Reports indicate China has conditionally approved DeepSeek, ByteDance, Alibaba, and Tencent to buy H200 chips, but with strict regulatory conditions still being finalized by the National Development and Reform Commission, according to VellaTimes. Nvidia CEO Jensen Huang, who joined Trump’s Beijing delegation at the last minute, has said the company is still waiting for formal permission.

Implications

The standoff carries significant consequences. For Nvidia, the company loses potential billions in China revenue while domestic Chinese competitors gain ground. For China, short-term AI development may slow without access to top-tier chips, but the long-term push for self-sufficiency could accelerate. For global trade policy, Trump’s 25% fee model could set a precedent for other sectors.

As Marc Einstein of Counterpoint Research told the BBC: “It will be interesting to see if this tariff model expands to other sectors.”

What to Watch

The key question remains whether China will eventually approve H200 purchases or whether the block is effectively permanent. The answer will shape not only Nvidia’s market position but the trajectory of the global AI race — and whether the U.S. can sell its most advanced technology to a strategic rival on its own terms.