The U.S. government considers implementing export restrictions on NVIDIA chips to China, limiting advanced AI chip availability.

U.S. officials are considering caps on the number of AI accelerators Nvidia Corp. can export to any one Chinese company, constraining the chipmaker's reentry into a crucial market. The Trump administration has discussed limiting Chinese firms to buying 75,000 of Nvidia's H200 chips each, according to people familiar with the matter. Shipments of Advanced Micro Devices Inc.'s MI325 chips, which have similar capabilities, would also count toward a customer's cap. While total shipments to China could reach as many as a million units, the 75,000 limit per company is less than half of what firms like Alibaba Group Holding Ltd. and ByteDance Ltd. privately told Nvidia they would like to purchase. Following the news, shares of both companies slipped in late trading, with Nvidia falling almost 1% to a low of $181, while AMD dropped to $197.07.

The H200, Nvidia's most powerful chip from its previous generation of products, represents a compromise in ongoing negotiations between the U.S. and China over AI chip exports. The chip has six times the computational capabilities of what Trump's team had previously authorized for sale to China and remains far better than anything Huawei Technologies Co. can make. Beijing had rejected Trump's earlier attempts to export Nvidia's less-advanced H20 chip, even though AMD ultimately sold some units of an equivalent processor. Trump considered Blackwell shipments but decided against them at the urging of senior advisors. Much hinges on Trump's planned meeting with Xi in a few weeks' time, when the U.S. president hopes to strike an agreement for H200 exports to nonmilitary Chinese companies.

Nvidia President and Chief Executive Jensen Huang convinced Trump that such exports would contribute to "a positive economic relationship with China" and be "positive for us overall," as Commerce Secretary Howard Lutnick recounted on the All-In Podcast in January. Nvidia's logic is that keeping Chinese AI companies hooked on American technology will prevent Huawei from building the revenue and developer ecosystem necessary to compete on the global stage. However, Nvidia has grown increasingly frustrated with implementation details, accusing bureaucrats of undermining Trump's vision and complaining that U.S. export conditions are so onerous as to dissuade Chinese firms from purchasing H200 chips at all. Conditions include a requirement for exporters to assert that chip sales to China won't cut into availability for American companies and a mandate to certify that Chinese customers will perform "rigorous" due diligence checks to ensure AI chips sold to China don't benefit the country's military. It remains unclear how Trump's team will navigate these provisions when making license decisions, given that Washington has designated or plans to designate three of China's four biggest tech companies as Chinese military companies, a claim the firms reject.