Trump's 25% cut on Nvidia chips sold to China backfired — Beijing won't approve a single H200 purchase, costs Huang $30B

President Donald Trump confirmed Friday what Nvidia (NASDAQ:NVDA) investors have been quietly worrying about for months. Speaking to reporters aboard Air Force One after a two-day summit with Chinese President Xi Jinping, Trump said Beijing has refused to approve purchases of Nvidia's H200 AI chips, and the reason is straightforward (1).

"They have a much higher level than H200. China needs it and yeah it came up," Trump said. "They choose not to buy because they want to develop their own. I think something could happen on that" (1).

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Nvidia stock fell 4.4% Friday, giving back the all-time high it had touched a day earlier on news that the U.S. Commerce Department had approved the sale (1). For investors trying to read where Nvidia's China revenue is heading, this week was supposed to be a turning point. Instead, it looked like confirmation that the turning point already passed.

What actually happened

Earlier in the week, Reuters reported that the Commerce Department had cleared roughly 10 Chinese firms — including Alibaba, Tencent, ByteDance and JD.com — to purchase up to 75,000 H200 chips each through approved distributors like Lenovo and Foxconn (2). At current pricing, that ceiling caps initial sales at roughly $15-$20 billion in revenue (3). KeyBanc analyst John Vinh has modeled total Chinese demand at around 1.5 million units annually, or about $30 billion in revenue, if the licensing framework expands (3).

Nvidia CEO Jensen Huang was added to the White House delegation at the last minute, joining Trump in Alaska en route to Beijing in what was widely read as an attempt to push a deal across the line (1).

It did not work. As of Friday, not a single H200 had shipped to a Chinese buyer, and Beijing had quietly steered domestic firms away from following through on the orders they placed earlier in the year (1).

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Why this is a bigger problem than it looks

Several pieces of evidence suggest China has made a strategic decision rather than a tactical pause.

Commerce Secretary Howard Lutnick told a Senate hearing last month that Chinese firms are "trying to keep their investment focused on their own domestic" suppliers including Huawei (4).