NVIDIA H200 China Strategy and the 25 Percent Export Fee Explained

For over two years, NVIDIA’s presence in China was constrained by strict U.S. export controls that barred its most advanced AI GPUs. Under previous rules, advanced chips like the H200 were not permitted, and NVIDIA’s China offerings focused on lower-performance, compliant models such as the H20. In December 2025, U.S. policymakers announced a conditional export framework that could allow NVIDIA to ship H200 GPUs to approved customers in China, subject to licensing and regulatory review.

Reports indicate NVIDIA may be allowed to export its H200 Tensor Core GPU to approved customers in China under a new conditional framework. Any shipments will require export licenses from U.S. authorities and regulatory review by Chinese officials before they can proceed.  

1. The Transactional Model: The 25% Export Fee

A striking element of this development is the proposed revenue-sharing model. Reports suggest that the U.S. government will collect a 25% fee on each H200 chip sold to China.

• Strategic Intent: This transactional approach replaces a total ban with a controlled export model. By allowing “previous generation” technology (the Hopper-based H200) into the market, the policy aims to capture revenue and maintain the dominance of the American tech stack while keeping the most advanced hardware, like the Blackwell series, restricted.
• Economic Impact: This fee effectively funnels a portion of the global AI boom directly into the U.S. Treasury, creating a new “toll” system for high-end technology trade.
• Performance vs. Access: While the H200 is not the latest Blackwell chip, it reportedly offers performance approximately six times higher than the China-compliant H20 chips currently available in the region.

2. Timeline and Initial Volume Estimates

According to Reuters and industry sources in late December 2025:

• Shipping Window: NVIDIA aims to begin these shipments by mid-February 2026, targeting a window just before the Lunar New Year.
• Initial Volume: The company reportedly plans to fulfill initial orders using 5,000 to 10,000 modules from existing stock. This equates to approximately 40,000 to 80,000 individual H200 chips.
• Near-Term Revenue: If shipments proceed as reported, this move could support NVIDIA’s near-term revenue by monetizing existing inventory while the flagship Blackwell production continues to scale for Western hyperscalers.

3. The Beijing Dilemma and Potential Bundling

While Washington has signaled a path forward, the final green light depends on Chinese regulatory response. Beijing faces a strategic choice between immediate AI computing power and long-term domestic self-reliance.

• Demand vs. Control: Major Chinese tech giants, including Alibaba and ByteDance, are reportedly eager to acquire the H200 due to its massive performance lead over domestic alternatives.
• The “Bundling” Discussion: Reports suggest Chinese officials have discussed a potential “bundling” rule. This would require local firms to purchase a set ratio of domestic chips, such as the Huawei Ascend 910C, for every NVIDIA H200 they import. This move would protect and nurture China’s homegrown semiconductor industry.

What This Means for NVIDIA (NVDA) Shareholders

This development suggests that China, which CEO Jensen Huang has previously noted could represent a potentially significant long term growth opportunity, may once again become an active growth driver for NVIDIA. By navigating these geopolitical “tolls,” NVIDIA maintains its software and hardware presence in the world’s second-largest AI market, preventing a total pivot toward domestic Chinese architectures.

Fact Sheet: AI Chip Landscape (Late 2025 Estimates)

Metric	NVIDIA H200 (Proposed Export)	NVIDIA H20 (Previous China Variant)	Huawei Ascend 910C (Domestic Rival)
HBM Capacity	141GB HBM3e	96GB HBM3	128GB HBM (Est.)
Performance	6x higher than H20	Baseline (Compliant)	2x higher than H20 (Est.)
Primary Moat	CUDA Software Stack	Regulatory Compliance	Domestic Supply Chain
Status	Subject to Licensing	Available	Scaling Production

Note: Huawei and domestic performance values are based on industry estimates and vary by configuration.