Nvidia’s Back in China, But Uncle Sam Takes a 25% Cut

NVDA Re-enters China Under New Rules

President Trump has announced that the US will allow Nvidia to export its H200 chips to approved customers in China, signalling a possible softening of export controls. The move comes with a catch. The US government will collect a 25% fee on every chip sold, and more advanced Blackwell generation products will remain restricted for now. This creates a narrow but meaningful opening for NVDA in the Chinese data center market while keeping tighter national security limits in place.

The deal permits shipments of NVDA H200 chips, which are the company’s second most advanced product. NVDA shares rose 1.2% after hours on the news. This reversal from the Biden-era restrictions could add an estimated US$2B to US$5B per quarter in revenue from China, and in the near term, we could see a meaningful surge in NVDA top line as Chinese buyers rush to secure supply.

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H200 Opens the Door to China’s AI Gold Rush

If demand is fully realised, H200 sales alone could contribute US$10B to US$15B to NVDA’s second half 2025 results. On an annual basis, the addressable opportunity may reach US$50B, representing roughly 10 to 15% of NVDA total revenue. The positioning of the chip is also important. The H200 performs extremely well on memory-bound workloads, although it trails the Blackwell architecture by around 2.5 to 4x on pure inference and training efficiency. This puts the H200 in a sweet spot for China-compliant AI infrastructure where constraints favour strong mid-tier performance, while Blackwell continues to dominate high-end global AI systems.

The backdrop to this renewed opening is the long-running rivalry shaped by the Biden-era export controls, which severely restricted NVDA China sales in an effort to slow military technology advancement. Those restrictions effectively cut off as much as US$23B in annual revenue potential. Now, as China’s AI ecosystem accelerates with heavy state backing and an ambition to integrate AI into nearly 90% of its economy by 2030, this policy shift could redirect billions back into NVDA quarterly revenue stream.

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At the same time, it highlights the strategic positioning of the H200. The chip offers robust performance for memory-intensive AI tasks but stays well below the frontier capabilities of Blackwell, which remains off limits. In our view, this balance makes the H200 a commercially powerful yet politically acceptable middle ground, giving NVDA renewed access to a massive market without crossing the national security red lines that triggered the original bans.