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Yesterday, President Trump announced that Nvidia could, in a complete turnaround in policy, supply China with its high-end H200 AI accelerators.
“I have informed President Xi, of China, that the United States will allow Nvidia to ship its H200 products to approved customers in China, and other Countries, under conditions that allow for continued strong National Security,” wrote Trump in a long post on Truth Social.
“President Xi responded positively! $25% will be paid to the United States of America,” Trump went on. “This policy will support American Jobs, strengthen U.S. Manufacturing, and benefit American Taxpayers.”
But the crucial message came at the end: “The Department of Commerce is finalizing the details, and the same approach will apply to AMD, Intel, and other GREAT American Companies. MAKE AMERICA GREAT AGAIN!”
So, let’s take a brief look at the likely winners from this deal. Which, it should be noted, still doesn’t include Nvidia’s current generation of AI accelerators, Blackwell, nor the next in line (Rubin).
This presidential administration has had the closest ties yet with Big Tech companies, and that includes Nvidia. We know that its CEO, Jensen Huang, has been trying to use this influence to reverse President Biden’s decision to block US high-tech exports for months, and he finally succeeded.
The result is reflected in yesterday’s stock performance, but some expected that graph to go even higher. Perhaps this is due to the fact that Nvidia is already struggling to keep up with chip demand, along with fears of an “AI bubble” effect, and a belief that other companies are better positioned to take advantage of China’s market.
AMD is the clear number two in the market for AI accelerators, so you might expect its stock to leap up in reaction to this news. And there was a lift: you can see below that its price went up by around $5 on President Trump’s announcement, only to drop down again to the same level and then slowly creep up during the day.
Personally, I think AMD is underestimated in this market, with its commitment to open standards likely to reap long-term rewards as companies grow disenchanted with Nvidia’s proprietary CUDA technology. But I may be wrong. And this could be a very long-term play, as Nvidia still has massive first-mover advantage.
While Intel – in which the US Government now has a 10% stake – got a namecheck in President Trump’s post, the immediate reaction to his news was negative. You can see the slump at 9.30am below.
This is perhaps a little surprising as Nvidia also has a chunky stake in Intel, and that should mean a long-term partnership between them to deliver turnkey AI solutions to organisations – including Chinese companies. One to watch.
There is one final winner in this deal: America itself. President Trump mentioned in his post that 25% of all the revenue would go straight to the administration, providing a hefty windfall.
Finally, we come to all those Chinese companies that can now use Nvidia H200 AI chips to develop their products. While this means they’re still behind the rest of the world, which can use Blackwell and the fastest AMD accelerators, it will almost certainly lead to a fresh flurry of AI-based tech from China.
