Nvidia(US:NVDA) The Motley Fool·2025-12-10 08:05Core Insights - Nvidia has received approval from President Trump to sell H200 GPUs in China, but the U.S. government will take 25% of the revenue from these sales, effectively acting as an export tax [1][9][10] Group 1: Market Position and Revenue Impact - Nvidia's market share in China has significantly declined from 26% in fiscal year ending January 2022 to 11% in the first three quarters of fiscal 2026 due to U.S. export restrictions [5][6] - The company previously held a 95% market share in China before the restrictions were imposed [6] - The H200 chip, while not as powerful as the Blackwell architecture chips, is the fastest chip built on the Hopper architecture and is approximately six times more powerful than the H20 [7][8] Group 2: Regulatory Developments - The Biden administration initially restricted Nvidia from exporting A100 and H100 GPUs to China, leading to an estimated loss of $400 million in quarterly revenue [6] - Subsequent restrictions led to the creation of compliant versions of GPUs, including the H800 and H20, but these were also restricted [6] - The Trump administration's recent decision to allow H200 sales in China came with a higher revenue cut than previously proposed, raising concerns about future increases in this fee [9][11] Group 3: Strategic Considerations - The approval to sell H200 GPUs presents an opportunity for Nvidia to regain lost revenue in the Chinese AI market, which is the second-largest globally [8] - However, the company faces a dilemma of either accepting what is effectively an illegal export tax or forgoing access to the Chinese market [10][11] - The potential for the U.S. government to increase the revenue cut in the future poses a significant risk to Nvidia's profitability in China [11]