US Moves Toward Allowing Nvidia AI Chip Sales to China

This article first appeared on GuruFocus.

The Trump administration has taken a further step toward reopening Nvidia (NASDAQ:NVDA) chip sales to China after the US Commerce Department issued revised criteria governing export approvals for advanced artificial intelligence processors. Under the regulation published Tuesday, applications to ship AI chips to Chinese buyers will now be reviewed on a case-by-case basis, easing an earlier stance that largely presumed denials. The move follows President Donald Trump’s decision last month to allow Nvidia and other chipmakers to sell advanced AI processors to China, representing a shift away from policies introduced starting in 2022 that were designed to restrict Beijing’s access to cutting-edge US technology.

The updated framework sets specific licensing requirements for both Nvidia and Advanced Micro Devices (NASDAQ:AMD), which is seeking approval to sell its MI325X chip in China. Companies applying for export clearance must certify that there is no shortage of the processors in the US and demonstrate that production for Chinese customers will not displace manufacturing capacity that could otherwise serve domestic buyers. Shipments to China will be limited to no more than 50% of the volume produced for the US market, while firms must also implement rigorous Know Your Customer procedures and submit the chips for third-party testing within the US.

The changes could allow Nvidia’s…