US Loosens AI Chip Export Restrictions to China Amid National Security Concerns
The U.S. Department of Commerce has relaxed restrictions on exporting advanced AI chips to China, allowing the sale of Nvidia H200 and AMD MI325X chips, which were previously banned due to national security concerns. This regulation could potentially increase China's AI capabilities significantly, despite limitations on exports and challenges in preventing military access to the technology. Following the announcement, stocks for Nvidia and Micron Technology fell over 1%, reflecting apprehensions about the implications of these new export rules.
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On January 13, the Department of Commerce published a regulation allowing the sale of advanced AI chips to China, following a policy change announced by President Trump on December 8. The regulation permits exports of Nvidia H200 and AMD MI325X chips, previously banned due to national security risks.
Although the regulation includes a cap of approximately 1 million H200 chips, this quantity could significantly enhance China's AI capabilities, increasing installed AI compute by 250% by 2026. The regulation also restricts the use of U.S. chips in Chinese data centers abroad but raises certification challenges regarding the prevention of Chinese military access to these technologies.
Additionally, the COINS Act, enacted in December 2025, establishes stricter regulations on U.S. investments in technology sectors in countries of concern, including China. Nvidia and Micron Technology's stock prices fell over 1% on January 14, 2024, amid concerns over new restrictions on chip exports to China, particularly targeting the H200 chip.
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