Nvidia must follow strict licensing terms for its AI chip sales to China, according to U.S. Commerce Secretary Howard Lutnick. Lutnick confirmed on February 10 that Nvidia must comply with conditions worked out with the State Department for its H200 chip sales.
Licensing terms for Nvidia’s AI chip sales
Lutnick stated that Nvidia cannot avoid the detailed licensing terms imposed on its AI chip sales to China. Nvidia has not agreed to all the proposed conditions, such as the Know-Your-Customer (KYC) requirement, which aims to prevent military access to the chips.
“Nvidia must live with these terms,” Lutnick emphasized, stressing the importance of these regulations in controlling U.S.-China tech trade.
U.S.-China trade truce allows Nvidia access
Nvidia gained permission to sell its AI chips to China after a trade truce between Presidents Donald Trump and Xi Jinping in October 2025. This deal postponed a U.S. rule restricting American technology sales to thousands of Chinese companies.
Lutnick, when asked if he trusted China to follow the rules, deferred to President Trump, noting the “complex relationship” between the two nations.
Nvidia’s growing AI initiatives
Despite the restrictions, Nvidia has continued to advance its AI chip technology. However, Lutnick’s statements highlight the challenges Nvidia faces as it navigates these regulatory barriers in the global market. The company must comply with these restrictions while pursuing its AI-driven growth strategy.
