Trump greenlights Nvidia H200 AI chip sales to China if U.S. gets 25% cut, says Xi responded positively

Trump Greenlights Nvidia H200 AI Chip Sales to China If U.S. Gets 25% Revenue Cut: Xi Responds Positively, Sources Say

The ongoing tech cold war between the United States and China just witnessed a dramatic, seismic shift. For years, the narrative has been one of increasing decoupling, strict export controls, and a fundamental strategic goal of denying Beijing access to cutting-edge U.S. artificial intelligence hardware. Specifically, high-performance computing components, such as those made by Nvidia, have been placed squarely in the crosshairs of the Commerce Department's restrictions.

I recall sitting in a Silicon Valley conference room last year, listening to tech executives lament the tight regulations that blocked the export of powerful GPUs like the A100 and H100 to key foreign markets. The consensus was clear: national security trumped profits. This environment fostered a sense of inevitability about the permanent separation of the **semiconductor war** fronts.

Now, a jaw-dropping reversal appears to be on the table. Former President Donald Trump has allegedly proposed a radical solution to the export control dilemma: allowing the highly coveted **Nvidia H200 AI chip**—a crucial piece of **advanced computing** technology—to be sold to Chinese entities, provided the U.S. government receives a massive 25% cut of the resulting revenue.

Sources close to the negotiations suggest that Chinese President Xi Jinping has viewed this revenue-sharing proposal with unexpected positivity, signaling a potential shift toward economic détente in exchange for critical technology access. This development, if confirmed and executed, would redefine the contours of U.S.-China trade relations and fundamentally alter the global AI landscape.

The Proposal Shockwave: A 25% Revenue Share Gambit

The Nvidia H200 is not just another chip; it is one of the most powerful **high-performance GPUs** currently available, optimized for massive generative AI models and large-scale data center operations. Its export to China has been explicitly curtailed under existing **export controls** designed to impede China's military and technological parity with the U.S.

The core of the alleged Trump proposal hinges on a simple yet revolutionary concept: monetizing U.S. technological superiority. Rather than imposing a complete denial strategy—which often leads to black market activity and indigenous Chinese attempts to reverse-engineer alternatives—the new strategy seeks to leverage American innovation as a constant revenue stream.

The 25% **revenue sharing** requirement is rumored to serve a dual purpose. First, it would directly contribute billions of dollars annually to the U.S. Treasury, potentially earmarked for funding domestic AI research and development (R&D), or reducing the national debt. Second, it ensures that even as China advances technologically, the U.S. remains the financial beneficiary of that advancement.

The sheer volume of demand for AI chips in China—driven by tech giants like Tencent, Alibaba, and Baidu—means that even a quarter share of the sales would translate into monumental income for Washington. This strategic pivot moves the U.S. from a position of economic denial to one of enforced financial partnership.

Initial reports from private diplomatic channels suggest that the alleged positive response from Xi Jinping stems from the practical necessity of the H200. While China is rapidly developing its own alternatives, the immediate performance gap remains significant. Securing a reliable supply of the Nvidia H200, even at a premium cost, offers an immediate acceleration to China's AI ambitions that domestic chips cannot yet match. This is a clear trade-off: geopolitical headache eased in exchange for crucial technological access.

Geopolitical Implications and Market Reaction

The implications of such a deal reach far beyond Nvidia's immediate balance sheet. If the U.S. government institutionalizes a policy of charging a premium royalty for the sale of strategic **dual-use technology**, it creates an entirely new framework for international **strategic competition**.

For **Nvidia**, the immediate economic upside is staggering. Despite current restrictions, the company has managed to create modified, restricted chips (like the H800) for the Chinese market. Removing or significantly easing restrictions on the full-power H200 would unlock billions in pent-up demand. Analysts suggest that the H200 market in China alone could generate $10 to $15 billion annually, meaning the 25% cut would channel $2.5 to $3.75 billion directly to the U.S. government, leaving Nvidia with a massive profit boost compared to zero sales under current rules.

However, the national security establishment remains deeply divided:

• **The Hawks:** Policy experts focused on military superiority argue that the revenue gained is not worth the risk of allowing China to train more sophisticated AI models, which could be utilized for military applications, espionage, or advanced surveillance systems. They advocate maintaining the current **decoupling strategy**.
• **The Pragmatists:** Economists and business-oriented policymakers argue that technological denial is ultimately futile. China will eventually catch up. Monetizing the lead now ensures U.S. R&D remains funded and prevents China from having zero incentive to cooperate on other trade fronts.

This proposal, if formalized, would signal an unprecedented **economic détente** in the technology sector. It moves away from the hardline policy of technological containment and introduces a profit-driven calculus to what was previously a pure **national security concern**. This could also potentially ease tensions in other areas, encouraging better cooperation on issues like global supply chain resilience and intellectual property protection, areas where the current punitive sanctions have done little to bridge the gap.

The Future of Tech Sanctions: Profit Over Policy?

The potential approval of the Nvidia H200 sales under this specific financial arrangement raises profound questions about the long-term viability and philosophical underpinning of U.S. **regulatory framework** concerning technology exports. Is the U.S. shifting from a strategy of prevention to one of perpetual taxation on technological access?

This deal would set a critical precedent for future generations of AI hardware, such as the upcoming Nvidia B100 (Blackwell). If the H200 sales are successful and profitable for the U.S. Treasury, it becomes highly probable that similar terms would be applied to even newer, more powerful chips.

The immediate challenge for the U.S. Commerce Department would be defining the mechanism by which the 25% cut is accurately measured and collected, ensuring transparency and preventing sophisticated accounting maneuvers by Chinese firms. Establishing this mechanism—likely involving robust auditing and strict contractual obligations—would be a monumental task but necessary for the policy's success.

The shift, advocated by Trump, focuses on the reality that technological dominance is transient. The time horizon for U.S. advantage in **advanced computing** chips is shrinking. Therefore, maximizing financial return during the peak of that advantage becomes a fiscally responsible policy, even if it carries strategic risks.

In conclusion, the alleged proposal to allow Nvidia H200 sales to China in exchange for a 25% U.S. revenue share is the biggest technological policy news of the decade. It moves the US-China relationship out of the realm of pure technological denial and into a complex, high-stakes game of monetized strategic competition. As political and tech leaders grapple with the ethical and security ramifications, the world watches to see if profit will ultimately become the new parameter for U.S. **export controls**. The reported positive response from Beijing suggests that this revolutionary path, once considered unthinkable, might just be the new reality of the global AI arms race.

Trump greenlights Nvidia H200 AI chip sales to China if U.S. gets 25% cut, says Xi responded positively

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