Shares of Nvidia experienced a 2% increase following a report from Bloomberg indicating that the Trump administration is considering allowing the company to sell its advanced H200 chips to China. This news marks a significant shift, as these chips are among the best produced by Nvidia’s Hopper generation, distinct from the less powerful H20 variants that the company tailored specifically for the Chinese market.
Discussions about the potential sale of Nvidia’s Blackwell chips to China had surfaced previously, particularly ahead of anticipated talks between President Trump and Chinese President Xi scheduled for late October. However, that proposal was reported to have been removed from the agenda just prior to the discussions, according to the Wall Street Journal.
Nvidia’s performance in the market has demonstrated resilience despite restrictions on its operations in China. The tech giant faced challenging circumstances due to export limitations that impacted its ability to distribute H20 chips—a situation that led to a notable $4.5 billion impairment charge during its first-quarter earnings. Company reports indicated that its second-quarter sales projections could have been significantly higher, by as much as $8 billion, if these regulations hadn’t been in place.
After negotiating with the Trump administration to regain the ability to ship H20 chips, Nvidia encountered a setback when Chinese authorities reportedly prohibited domestic technology firms from purchasing these semiconductors. Nvidia’s Chief Financial Officer, Colette Kress, noted during a recent analysts’ conference call that “sizable purchase orders for the H20 never materialized in the quarter due to geopolitical issues and the increasingly competitive market in China.”
In a related development, prior to Nvidia’s earnings report, a statement from Trump suggested a positive relationship with the company, stating, “If Nvidia’s Huang is happy, I’m happy.” Despite the generally favorable market response to Nvidia’s robust third-quarter results, it appears that CEO Jensen Huang’s sentiments about the stock’s performance may not have reflected the same optimism.
The evolving landscape of U.S.-China relations continues to pose challenges and opportunities for tech firms like Nvidia, as discussions surrounding chip exports progress amid a backdrop of geopolitical complexities.
