Under revised standards published Tuesday, the U.S. Department of Commerce said it will no longer automatically reject applications to export advanced AI chips to China. Instead, each request will be individually assessed, marking a notable softening from Washington’s previous hardline stance on semiconductor exports to the world’s second-largest economy.
The new framework applies to Nvidia as well as its main rival, Advanced Micro Devices (AMD), which is seeking approval to export its MI325X AI processor to Chinese customers.
Among the key conditions, chipmakers must demonstrate that exports to China will not create shortages in the U.S. market. Companies are also required to prove that production allocated for Chinese buyers will not displace manufacturing capacity that could otherwise serve domestic demand.
To that end, shipments to China will be capped at no more than 50% of the volume produced for the U.S. market, according to the rule.
The licensing regime will be overseen by the Commerce Department’s Bureau of Industry and Security (BIS), which will also require firms to implement enhanced “know-your-customer” procedures to prevent unauthorized use or diversion of the technology. In addition, exported chips will be subject to third-party testing conducted within the United States.
The regulation represents a critical step in implementing President Donald Trump’s decision, announced last month, to permit limited exports of advanced AI processors to China, reversing some of the restrictions first imposed in 2022 to prevent Beijing, and particularly China’s military, from accessing cutting-edge U.S. technology.
“This is a meaningful departure from prior policy,” one industry analyst said, noting that the earlier framework effectively assumed denial for most advanced chip exports to China.
AMD said in a statement that it “complies with all U.S. export control laws and policies.” Nvidia declined to comment immediately.
The move highlights Washington’s attempt to strike a delicate balance between protecting national security and preserving the global competitiveness of U.S. semiconductor firms, which have repeatedly warned that sweeping export bans risk ceding market share to Chinese rivals.
The H200 chip, introduced more than two years ago, would become the most advanced AI processor legally allowed for export to China if approvals are granted. Nvidia already sells more powerful chips in the U.S. under its Blackwell architecture and is preparing to transition to an even faster generation of processors named after astronomer Vera Rubin.
For now, the new rules suggest a more flexible, if tightly controlled, approach to U.S.-China technology trade, one that reflects shifting political calculations as well as mounting pressure from the semiconductor industry.
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