US eases path for NVIDIA's AI chip sales to China
What's the story
The US Department of Commerce has eased its stance on artificial intelligence (AI) chip exports to China. The department will now consider applications for such exports on a case-by-case basis, instead of automatically denying them. This change comes as part of revised criteria for granting government approval for shipping these processors to Chinese buyers.
Export guidelines
New regulations for AI chip exports
The new regulations, published on Tuesday, set licensing requirements for NVIDIA and its competitor Advanced Micro Devices Inc. (AMD). The companies must prove that there is no shortage of these processors in the US. They also have to ensure that production for Chinese customers won't affect their capacity to produce chips for domestic buyers.
Restrictions imposed
Export limits and security measures
The new rules also impose restrictions on the number of chips that can be shipped to China. Companies can export no more than 50% of their total production for the US market. They are also required to employ stringent "Know Your Customer" procedures to prevent unauthorized use of this technology. Third-party testing in the US is also mandatory under these regulations.
Company statements
AMD and NVIDIA respond to new regulations
In response to the new regulations, an AMD spokesperson said, "We comply with all US export control laws and policies." However, NVIDIA has not yet commented on the matter. The revised rules are a significant step toward implementing President Donald Trump's decision last month to allow NVIDIA and other chipmakers to sell advanced AI processors to China.
Technological advancement
H200 chip: A breakthrough in AI technology
The H200, launched over two years ago, is the most advanced AI chip to be legally exported to Chinese customers. NVIDIA sells its more-advanced Blackwell generation in the US and is preparing to shift to an even faster family of chips named after astronomer Vera Rubin. The move marks a major departure from policies introduced in 2022 aimed at preventing Beijing and its military from accessing cutting-edge US technologies.
Market speculation
Uncertain demand for H200 chips in China
Despite the regulatory change, the demand for H200 chips in China remains uncertain. Reports suggest that Beijing has been urging tech companies to use more domestically produced chips. According to The Information, Chinese officials have told some firms that approval to purchase H200s would only be granted under certain conditions, such as for university research or development labs.