If I were the Party in Beijing, I’m not sure how I’d approach Donald Trump’s “generous” decision to let Nvidia ship outdated chips to customers in China.

In the official announcement, posted to TruthSocial (because where else would the President of the United States deliver important national security news if not a ramshackle social media platform, sandwiched between ads for crow’s feet cures and Tucker Carlson’s nicotine pouches), Trump said Xi Jinping “responded positively!” when told Chinese customers will be allowed to purchase H200s from Jensen Huang.

I don’t doubt that. I mean, if I want the latest version of something but for whatever reason I can only have a stripped down, outdated version of that thing designed specially to leave me at a disadvantage, and then someone comes along and tells me that while I still can’t have the thing I really want, I can have something that’s at least a little closer to that thing, I’m not going to respond negatively. In all likelihood, I’ll just nod politely and think, but not say, “Gee, thanks, but still fuck you for not letting me buy what I actually want.”

That was doubtlessly Xi’s reaction when he was “informed” by Trump the US is allowing Nvidia to ship the H200s to “approved customers” in China under a set of conditions which Trump described as still conducive to the protection of US national security.

Recall that Trump and Huang struck a deal over the summer that would’ve allowed Nvidia to ship H20s, a less-advanced chip Nvidia designed for end users in China, provided the company give the US government a 15% kickback from any associated revenue. (When Nvidia reported Q1 results in May, the company said it incurred $8 billion in lost sales tied to the Trump administration’s April decision to restrict sales of the H20.)

Critics decried the arrangement, accusing Trump of putting US foreign policy up for sale. “What’s next — letting Lockheed Martin sell F-35s to China for a 15% commission?” a former NSC official sneered, in remarks to the FT.

At the time, I said we may as well stop pretending to be offended or surprised. Here’s how I put it:

This idea of Trump’s is self-evidently odious and it sets a God-awful precedent but — and at the risk of trivializing another crossing the Rubicon moment and/or normalizing detestable behavior — what else is new? This is just par for the course. Par for Bedminster.

Fast forward four months and Trump upped the kickback to 25%. That’s the share of H200 sales the US will get assuming Huang manages to sell any of the chips to Chinese customers.

“This policy will support American Jobs, strengthen US manufacturing, and benefit American taxpayers,” Trump said, before disparaging Joe Biden for “forcing” American companies to build “‘degraded’ products that nobody wanted.”

The problem is, nobody wants the H200s anymore either, and it’s entirely possible China will shun the chips if not because they’re already dated technology but rather out of a combination of national pride and advances in local chip-making and design which China hopes will one day make it self-sufficient in the space.

In September, China outright banned the H20 and also the RTX Pro 6000D, another outdated product Nvidia tried to foist on locals. It’s possible the ban on the lower-performance chips was just a negotiating tactic aimed at compelling Trump to eventually green-light H200 sales. If so, mission accomplished.

Notably, Trump didn’t get anything in return for this agreement other than the 25% kickback. He says that’s a win for US taxpayers, but even if the associated revenue turns out to be meaningful for Nvidia — and that’s not guaranteed — Trump’s cut of the sales won’t even amount to a drop in the proverbial bucket in the context of America’s annual budget.

Presumably, local Chinese firms will learn from the H200 once they have it in-hand, and the more powerful chip could potentially enhance the PLA’s capabilities given that every piece of new technology available to the Chinese is studied for possible military applications.

As was the case over the summer, Huang won Trump over on the H200 sales by meeting with him in person. It’s not that Trump shouldn’t be meeting with Huang, but this president’s notorious for exhibiting a “last person I spoke to” bias, which is to say if you’re that person (i.e., the last person he spoke to about a specific issue), he’s very likely to parrot your talking points or even act on them in short order, often without getting a second opinion.

It’s worth noting that while talking up Nvidia’s Blackwell chip, Huang called the H200 a dinosaur. “[W]hen Blackwell starts shipping in volume, you couldn’t give Hoppers away,” he said in March. “My sales guys are saying, ‘Oh no, don’t say that.’ There are circumstances where Hopper is fine. That is the best thing I could say about Hopper. There are circumstances where you’re fine.”

Meanwhile, the US arrested a couple of guys and accused them of conspiring to sell Nvidia chips, including the H200, to a buyer in China in violation of US export restrictions.

The sting operation, called “Operation Gatekeeper,” ensnared 43-year-old Texas resident Haochun Hsu who, through his company, smuggled $160 million worth of Nvidia H100s and H200s between October 2024 and May 2025.

In announcing what the DoJ called a “major China-linked AI tech smuggling network,” the DoJ described Hsu’s actions as a threat to US national security. After all, “funneling cutting-edge AI technology to those who would use it against American interests” is dangerous business, as US Attorney for the Southern District of Texas Nicholas Ganjei, put it.

Hsu now faces up to a decade in prison. If only he’d waited a year, he could’ve legally exported the same chips.