TECH NEWS – This time, the two companies are allowed to sell hardware in an otherwise hostile country, albeit under far stricter regulations.

Politics has played a major role in shaping the Chinese business environment for AI chip manufacturers. As a result, both Nvidia and AMD have been forced to work closely with the U.S. government to ensure their chips comply with architectural requirements. A breakthrough came in August when Trump announced that the U.S. government would impose a 15% profit margin on all AMD and Nvidia inventory shipped to China, allowing the companies to sell chips such as the Hopper H20 and Instinct MI308.

Beijing, however, pushed back against the H20 AI accelerators and launched a regulatory investigation to determine whether the chips contained security backdoors. China also implemented national policies encouraging domestic AI giants to rely on local chipmakers such as Huawei, Cambricon, and BirenTech, significantly reducing the likelihood of Nvidia and AMD returning to the Chinese market.

This triggered widespread skepticism within the AI industry as China rapidly narrowed the gap with the United States. Nvidia CEO Jensen Huang stated that China is now only nanoseconds behind America. These remarks helped pave the way for another regulatory breakthrough for Nvidia and AMD just weeks ago.

During the second week of December, Trump announced that Nvidia would be permitted to sell its Hopper H200 AI chips in China under a 25% tax rate, higher than the rate applied to the H20. While the move allows Nvidia to return with a more powerful option, it also complicates the supply chain and increases costs.

According to Reuters, shipments of Nvidia’s H200 chips are expected to begin in mid-February following an extensive review of export license applications. Initial shipments are estimated at 40,000 to 80,000 units, with Nvidia planning further capacity expansion to meet strong demand.

MLex reports that AMD could ship up to 50,000 Instinct MI308 AI chips to Alibaba, making it one of AMD’s largest orders in the region. This suggests China is seeking to secure every available unit of computing power.

Source: WCCFTech, Reuters, MLex