WASHINGTON, Dec 8 (Reuters) – The U.S. government will allow Nvidia to export its H200 artificial intelligence chips to China, collecting a fee for each chip, U.S. President Donald Trump said on Monday. Nvidia shares rose 1.2% in after-hours trading after Trump made the announcement on Truth Social, having closed 3.16% higher after Semafor first reported the possibility of approval.

Trump said that he had informed President Xi Jinping of China, where Nvidia’s chips are under government scrutiny, about the move and he “responded positively,” according to Trump’s post. Trump said the U.S. Commerce Department was finalizing details of the arrangement and the same approach would apply to other AI chip firms such as Advanced Micro Devices and Intel .

“We will protect National Security, create American Jobs, and keep America’s lead in AI,” Trump wrote on Truth Social. “NVIDIA’s U.S. Customers are already moving forward with their incredible, highly advanced Blackwell chips, and soon, Rubin, neither of which are part of this deal.” Allowing the shipments could signal a friendlier approach to China, after Trump and Xi brokered a truce in the two countries’ trade and tech war in Busan, South Korea in late October.

Administration officials consider the move a compromise between sending Nvidia’s latest Blackwell chips to China, which Trump has declined to allow, and sending China no U.S. chips at all, which officials believe would bolster Huawei’s efforts to sell AI chips in China, the person familiar with the matter said. Nvidia and the U.S. Commerce Department did not immediately respond to requests for comment.

China hawks in Washington are concerned that selling more advanced AI chips to China could help Beijing supercharge its military, fears that had first prompted limits on such exports by the Biden administration. The Trump administration had been considering greenlighting the sale, sources told Reuters last month.

Earlier media reports of H200 export approvals drew sharp criticism from Senator Elizabeth Warren, a Massachusetts Democrat who supported a bipartisan effort to reserve powerful U.S. AI chips for U.S. firms. “After his backroom meeting with Donald Trump and his company’s donation to the Trump ballroom, (Nvidia) CEO Jensen Huang got his wish to sell the most powerful AI chip we’ve ever sold to China,” Warren said in a statement. “This risks turbocharging China’s bid for technological and military dominance and undermining U.S. economic and national security.”

The H200 chip, unveiled two years ago, has more high-bandwidth memory than its predecessor, the H100, allowing it to process data more quickly.

According to a report released on Sunday by the non-partisan think tank the Institute for Progress, the H200 would be almost six times as powerful as the H20, the most advanced AI semiconductor that can legally be exported to China, after the Trump administration reversed its short-lived ban on such sales this year.

Export of the chip would allow Chinese AI labs to build AI supercomputers that achieve performance similar to top U.S. AI supercomputers, albeit at higher costs, the report also said.

Faced with Beijing’s muscular use of export controls on rare earth minerals, which are critical for producing a raft of tech goods, Trump this year threatened new restrictions on tech exports to China, but ultimately rolled them back in most cases.

China’s cybersecurity regulator summoned Nvidia to a meeting to explain whether its H20 AI chip had any backdoor security risks, an allegation Nvidia has denied, Reuters reported in August.

Chris McGuire, an expert on technology and national security who served at the U.S. State Department until this summer, said Chinese firms would likely still buy H200s.

“China would almost certainly accept it,” said McGuire, now a fellow with the Council on Foreign Relations. “It would be self-defeating not to, given the H200 is better than every chip the Chinese can make.” But Craig Singleton, a senior fellow at Washington think tank Foundation for Defense of Democracies, said it remained unclear how Beijing would react to U.S. export approvals.

“Chinese firms want H200s, but the Chinese state is driven by paranoia and pride — paranoia about backdoors and dependence on U.S. chips, and pride in pushing domestic alternatives,” Singleton said. “Washington may approve the chips, but Beijing still has to let them in.” (Reporting by Jasper Ward and Michael Martina in Washington, Karen Friefeld in New York and Stephen Nellis in San Francisco; Writing by Doina Chiacu; Editing by Leslie Adler, Rod Nickel and Jamie Freed)

Nvidia has become the first $5 trillion company, just three months after the Silicon Valley chipmaker was first to break through the $4 trillion barrier.

Hitting the new benchmark puts more emphasis on the upheaval being unleashed by an artificial intelligence craze that’s widely viewed as the biggest tectonic shift in technology since Apple co—founder Steve Jobs unveiled the first iPhone 18 years ago. Apple rode the iPhone’s success to become the first publicly traded company to be valued at $1 trillion, $2 trillion and eventually, $3 trillion.

But there are concerns of a possible AI bubble, with officials at the Bank of England earlier this month flagging the growing risk that tech stock prices pumped up by the AI boom could burst. The head of the International Monetary Fund has raised a similar alarm.

The ravenous appetite for Nvidia’s chips is the main reason that the company’s stock price has increased so rapidly since early 2023. On Wednesday the shares touched $207.86 in early morning trading with 24.3 billion shares outstanding, putting its market cap at $5.05 trillion.

In comparison, Nvidia’s value is greater than the GDP of India, Japan and the United Kingdom, according to the International Monetary Fund.

Nvidia carved out an early lead in tailoring its chipsets known as graphics processing units, or GPUs, from use in powering video games to helping to train powerful AI systems, like the technology behind ChatGPT and image generators. Demand skyrocketed as more people began using AI chatbots. Tech companies scrambled for more chips to build and run them.

Nvidia CEO Jensen Huang has downplayed concerns of a bubble bursting, saying that the generative AI chatbots that were merely “interesting” when they first took hold a few years ago are now becoming so useful that they will be profitable.

Huang was heading to South Korea this week as leaders from major Pacific Rim economies, including the United States, China and Japan, are gathering for the annual Asia-Pacific Economic Cooperation summit that has long championed free trade but is now confronting sweeping U.S. tariffs on technology and other products.

The multilateral gathering in Gyeongju is expected to be overshadowed by a sideline event — a face-to-face meeting on Thursday between Trump and Chinese leader Xi Jinping — as their intensifying trade war leaves the South Korean hosts in a difficult balancing act.

On Tuesday, Huang disclosed $500 billion in chip orders. The company also announced a partnership with Uber on robotaxis and a $1 billion investment in Nokia, with the two planning to work together on 6G technology.

In addition, Nvidia is teaming with the Department of Energy to build seven new AI supercomputers.

Last month Nvidia announced that it will invest $100 billion in OpenAI as part of a partnership that will add at least 10 gigawatts of Nvidia AI data centers to ramp up the computing power for the owner of the artificial intelligence chatbot ChatGPT.

In August, Huang said that Nvidia was discussing a potential new computer chip designed for China with the Trump administration. Trump said on Air Force One that he will speak with Xi about Nvidia’s chips on Thursday on the sidelines of the APEC event that Huang is also attending.

In August, Trump announced a deal with chipmakers Nvidia and AMD to lift export controls on sales of advanced chips to China in exchange for a 15% cut of the revenue, despite concerns from national security experts that such chips will end up in the hands of Chinese military and intelligence services. That same month, Trump announced that the U.S. government had taken a 10 percent stake in Intel worth around $11 billion.

Then, Nvidia announced last month that it’s investing $5 billion in Intel and will collaborate with the struggling semiconductor company.