• The Trump administration has approved Nvidia (NVDA) and AMD (AMD) to export AI accelerators to China for the first time in over two years, reversing previous restrictions.
  • Raymond James estimates Nvidia could see $7–$12.5 billion in revenue upside, while AMD may add $500–$800 million, contingent on Chinese regulatory clearance.
  • The deal includes U.S. revenue-sharing agreements and faces uncertainties around approval timing, Chinese demand, and domestic industry concerns.

A Policy Reversal with Major Financial Stakes

In a dramatic shift from the Biden administration's national security-focused approach, the U.S. has granted Nvidia and AMD licenses to sell advanced AI chips to China, potentially unlocking billions in revenue for the semiconductor giants. According to people familiar with the matter, the Trump administration approved the exports following negotiations with Chinese President Xi Jinping in October 2025, suggesting a broader "chips for precious rare-earth materials" agreement. Nvidia received approval to ship its H200 GPU, with initial orders of 5,000 to 10,000 modules planned by mid-February 2026, while AMD secured licenses for its MI308 accelerator nearing commercial availability.

Efforts to finalize the deals have hit a snag, however, as Beijing has not yet approved domestic purchases. Chinese regulators are reportedly concerned that importing advanced Nvidia chips could undermine efforts to develop an indigenous semiconductor industry. Without approval, the companies would be unable to capitalize on what one analyst described as a $50 billion market opportunity. "There's significant pent-up demand from Chinese tech firms like Alibaba (BABA) and ByteDance," said a source close to the negotiations, who requested anonymity due to the sensitivity of the discussions. "But the Chinese government is weighing whether to impose conditions, such as requiring firms to buy domestic chips alongside each H200."

Revenue Sharing and Production Ramifications

The financial implications are substantial, yet complex. Under the arrangement, the U.S. government will receive 25% of revenues from Nvidia sales and 15% from AMD sales, reducing profitability compared to unrestricted markets. Raymond James estimates suggest Nvidia could add $0.15–$0.30 to its 2026 EPS, while AMD might see $0.10–$0.20 in non-GAAP EPS upside, mainly from China-compliant accelerators. For context, Nvidia's Hopper GPU sales, including H200s, generated only $2 billion in Q3 2025, highlighting the potential scale of this opportunity.

If Chinese demand materializes, Nvidia plans to resume Hopper GPU production at TSMC, with additional capacity available in the second half of 2026, as the company has prioritized newer Blackwell chips. AMD, meanwhile, may gain market share in China given Nvidia's historical dominance. "This represents a fundamental policy realignment," noted an industry insider. "Washington is pivoting toward economic competition over pure national security concerns, prioritizing revenue generation and manufacturing support." The companies declined to comment on specific timelines, but Nvidia confirmed it is awaiting Chinese regulatory clearance.

Uncertainties and Legislative Scrutiny

Despite the approvals, key risks remain. Approval timing is uncertain, with no confirmed timeline from Chinese authorities. Chinese demand could be limited by domestic industry pressures or purchasing conditions. And the export fees—those revenue-sharing obligations—add a layer of complexity to profitability. Legislative scrutiny is also mounting; Senator Elizabeth Warren and other Democratic lawmakers have demanded transparency from the Commerce Department on license approvals and military implications before finalization. "We need to ensure these chips don't end up enhancing China's military capabilities," Warren stated in a recent letter reviewed by sources.

Market reaction has been cautiously optimistic, with semiconductor stocks showing modest gains amid the uncertainty. The deal marks the first significant relaxation of U.S. export controls imposed since 2023 over military and strategic AI concerns. As one analyst put it, "Even limited volumes could be meaningful for both companies, but it's a waiting game now." Attempts to reach Chinese commerce officials for comment were unsuccessful. Updates will follow as regulatory decisions emerge.