Jensen Huang for sure seems to be having a lot of fun in China this week. the CEO of Nvidia spotted going for a leisurely bike ride and browsing a fresh fruit stand in Shanghai, as well as enjoying beef hot pot at a low-key restaurant in Shenzhen.

Carefree touring is not just good optics. Huang has real reason to feel happy: His long-standing lobbying campaign in Washington has, in fact, finally paid off. While Huang was gallivanting around China, many news outlets reports that Beijing has approved the sale of hundreds of thousands of powerful Nvidia H200 AI chips to Chinese companies.

According to Reuters, China has agreed to consent ByteDance, Alibaba, and Tencent will buy more than 400,000 of the chips in total under the conditional license granted during the visit of the Nvidia CEO. More approvals are expected in the coming weeks. (Nvidia and the tech companies did not immediately respond to requests for comment.)

The alleged chip sale is the culmination of a sensational The change in American policy last year. Under the Biden administration, the US tightly tightened export controls on high-end AI chips and banned models such as the H200 from being sold to Chinese customers due to national security concerns. The restrictions are intended to limit Beijing ability to develop powerful artificial intelligence systems with military or other sensitive applications.

But under President Trump, a different logic—advocated by Huang and White House AI and crypto czar David Sacks—has prevailed. They argue that allowing China access to some American AI chips is better than handing over such a large and important market entirely to Chinese chipmakers, both economically and because it would theoretically keep Chinese companies dependent on US technology.

In recent internal discussions, White House officials also justified H200 sales by pointing to continued smuggling of advanced chips to China, which they argue proves that the US restrictions are ineffective, according to two people familiar with the matter. Officials argue that allowing limited, regulated sales is better than an opaque gray market that gives US authorities little visibility into where the chips ultimately end up.

“The Trump administration is committed to ensuring dominance of the American tech stack—without compromising national security,” White House spokesman Kush Desai said in a statement.

Huang and the Trump administration aren’t the only ones likely to be walking away happy here. By allowing domestic companies to buy H200 chips in limited quantities, Beijing has the opportunity to achieve two strategic goals at once, said Samuel Bresnick, a research fellow at Georgetown’s Center for Security and Emerging Technology.

China’s domestic tech champions can now get access to the compute they desperately need to train powerful, near-frontier AI models similar to the latest offerings from OpenAI and other American labs. But by keeping strict controls on who can buy Nvidia hardware, Beijing is helping to ensure that demand for Huawei chips remains high and there are strong incentives for companies to continue building China’s domestic semiconductor ecosystem.

That outcome is “very good evidence that this David Sacks idea of ​​keeping China tied to American technology is not what it’s going to be,” Bresnick said. “I see this as proof that China is completely uncomfortable with the idea of ​​allowing its own booming chip industry to be swamped by Nvidia.”

But the real damage may come from Washington’s whiplash. For years, lawmakers have sent mixed signals about what the U.S. wants to accomplish with chip controls, and China is watching closely. “The worst possible thing we can do is relapse,” Bresnick said. “We’ve given China what they need to get their own chips while also giving them access at the same time.”

Updated: 1/29/2026, 11:03 am PST: This story has been updated with comment from the White House.

This is an edition of Zeyi Yang and Louise Matsakis‘ Made in China newsletter. Read previous newsletters here.