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Shares of Nvidia surged 2% following a report by Bloomberg that the Trump administration is considering allowing the company to sell its most advanced Hopper chips, specifically the H200, to China. Unlike the lesser versions designed specifically for the Chinese market, the H200 represents Nvidia's top-tier technology, marking a potential shift in the ongoing tensions surrounding technology exports to China.

In the lead-up to discussions between President Trump and President Xi Jinping scheduled for late October, the administration had contemplated the idea of permitting sales of Nvidia's Blackwell chips to China, but this proposal was reportedly removed from the agenda at the last minute, according to the Wall Street Journal.

Nvidia has managed to achieve significant success in 2025 largely despite ongoing restrictions affecting its operations in China. New export limitations significantly hampered Nvidia's ability to ship its H20 chips to the world’s second-largest economy. The company announced a notable $4.5 billion impairment charge in its first-quarter earnings due to these export bans, with estimates suggesting that its second-quarter sales could have been $8 billion higher absent these curbs.

In the past, after reaching an agreement with the Trump administration to restore shipping capabilities for its H20 chips, Nvidia faced retaliation as China reportedly banned its tech firms from purchasing the semiconductors, complicating the relationship even further. During a recent conference call with analysts, Nvidia’s CFO, Colette Kress, noted, “Sizable purchase orders [for the H20] never materialized in the quarter due to geopolitical issues and the increasingly competitive market in China.”

Just before Nvidia's upcoming earnings report, an intriguing statement made headlines: “If Nvidia's Jensen Huang is happy, I'm happy,” Trump remarked. However, it seems that Huang was less than enthusiastic about the market's reaction to Nvidia's strong third-quarter results. The uncertainty surrounding China’s semiconductor market continues to loom large, affecting investor sentiment.

This potential reopening for Nvidia highlights the broader implications of U.S.-China relations, particularly in the tech sector, where both nations are vying for dominance. The semiconductor industry is crucial not only for economic growth but also for national security, making the negotiations surrounding these exports particularly sensitive.

As both the U.S. and Chinese governments navigate this complex landscape, the outcomes of such discussions could significantly impact Nvidia's future, especially if they are able to secure a more favorable position in the Chinese market. Investors and industry analysts alike will be closely watching how these talks unfold and what they could mean for Nvidia's profitability and the broader semiconductor industry.