TLDR
- Nvidia is negotiating with the Trump administration over export licenses for H200 AI chips to Chinese companies, with the U.S. willing to approve ByteDance’s purchase but requiring strict Know-Your-Customer procedures.
- The stock dropped 1.4% to $177.74 as negotiations remain unresolved, trading below key moving averages at $182-$184 with support at the 200-day moving average near $168.
- Nvidia states it cannot unilaterally accept license conditions and warns that overly restrictive terms could push Chinese buyers toward non-U.S. chip suppliers.
- China has granted preliminary approval to ByteDance, Tencent, Alibaba, and Deepseek to import the chips, though final regulatory conditions are still being finalized.
- The Commerce Department’s January 15 regulation requires third-party lab testing of chips and certification of rigorous customer screening to prevent military access.
Nvidia stock closed at $177.74 on February 5, down 1.4% as regulatory uncertainty continues to cloud H200 chip exports to China. The chipmaker remains locked in negotiations with the Trump administration over licensing terms that would allow Chinese tech giants to purchase its advanced AI hardware.
The Trump administration indicated about two weeks ago it would approve a license for ByteDance to buy H200 chips. However, Nvidia has not agreed to the proposed conditions, particularly around Know-Your-Customer requirements designed to prevent China’s military from accessing the technology.
Nvidia emphasized it acts as an intermediary between U.S. regulators and customers. The company cannot unilaterally accept or reject license conditions. “Although KYC is important, KYC is not the issue,” a Nvidia spokesperson said. “For American industry to make any sales, the conditions need to be commercially practical, else the market will continue to move to foreign alternatives.”
The Commerce Department issued a regulation on January 15 that formally loosened licensing policy for advanced AI chips. But it came with strict requirements. Applicants must certify their customers will use rigorous screening procedures to prevent unauthorized remote access. They must also provide lists of remote users tied to countries of concern like Iran, Cuba, and Venezuela.
A U.S. third-party lab must test the chips before shipment to ensure they meet specifications. This requirement is seen as a mechanism for the U.S. government to collect its 25% fee on sales, an arrangement President Trump announced in December.
Stock Trading Below Key Levels
From a technical perspective, Nvidia shares remain under pressure. The stock is trading below its 20-day moving average near $184 and its 50-day moving average around $182. Both levels are acting as resistance zones, suggesting sellers control the near-term direction.
The 200-day moving average sits near $168. This level represents critical medium-term support. As long as Nvidia holds above this zone, the broader uptrend from last year remains intact. A daily close below $168 would signal more serious trend deterioration.
The Relative Strength Index hovers in the low 30s, approaching oversold territory but not yet confirming a reversal. Volume has moderated during the recent decline, indicating the sell-off is corrective rather than panic-driven.
China Approval Process Moving Forward
China has granted preliminary approval to ByteDance, Tencent, Alibaba, and AI startup Deepseek to import the chips. Regulatory conditions for China’s approvals are still being finalized on that side of the border.
The situation represents another chapter in the U.S.-China tech war. Trump’s December decision to allow chip sales with a 25% cut to the U.S. government drew criticism from China hawks. They view the policy as a national security risk and fear China will use the chips to strengthen military capabilities.
The same export arrangement applies to similar chips from Advanced Micro Devices and Intel. Commerce Department procedures typically involve circulating pending licenses to agencies including State, Defense, and Energy departments. Once they agree on conditions, they’re sent to the applicant for feedback.
Near-Term Trading Range Expected
In the short term, Nvidia is likely to trade between $170 and $185 as markets wait for regulatory clarity. Dips toward $168-$172 should attract buyers, while rallies toward $185 may face selling pressure from short-term traders.
A break above $185 would require positive news on export approvals or a broader rebound in AI stocks. That could push Nvidia toward the $195-$200 zone.
One source suggested at least some chips are likely to reach China by the time Trump plans to meet with Chinese President Xi Jinping in April. The Commerce Department did not immediately respond to requests for comment. ByteDance could not be immediately reached for comment.
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