The US government has given chip giant Nvidia the green light to sell its advanced artificial intelligence (AI) processors in China, the Department of Commerce said on Tuesday.

The H200, Nvidia’s second-most-advanced semiconductor, had been restricted by Washington over concerns that it would give China’s technology industry and military an edge over the US.

The Commerce Department said the chips can be shipped to China granted that there is sufficient supply of the processors in the US.

President Donald Trump said last month that he would allow the chip sales to “approved customers” in China and collect a 25% fee.

The BBC has contacted Nvidia for comment.

The Commerce Department’s Bureau of Industry and Security said its revised export policy applies to Nvidia’s H200 chips, as well as less advanced processors.

The H200 chip is a generation behind Nvidia’s Blackwell processor, which is considered to be the world’s most advanced AI semiconductor and remains blocked from sale in China.

Nvidia has been caught in a geopolitical tug-of-war between the US and China – two sides of a global AI race.

Trump reversed the chip-selling restriction last July, but demanded that Nvidia pay a cut of its earnings from China to the US government.

Beijing then reportedly ordered its tech companies to boycott Nvidia’s China-bound chips and prioritise semiconductors made domestically. That move was designed to bolster China’s tech industry, though experts have consistently said that the country’s chips still lag behind the US.

Throughout 2025, Nvidia CEO Jensen Huang continually lobbied Washington to allow the sale of the firm’s high-powered chips to China, arguing that global market excess is essential for America’s competitiveness.

Some officials in the US, however, have expressed concerns that the chips would benefit Beijing’s military and hurt America’s progress in AI development.