TLDRs;
- Nvidia stock dips slightly as US imposes stricter licensing for AI chip exports to China.
- New rules require detailed certification to prevent diversion of H200 chips to military use.
- Analysts warn US restrictions may not fully limit China’s AI chip growth in 2026.
- Supply-chain constraints and memory shortages could complicate Nvidia’s compliance with US rules.
Shares of Nvidia (NVDA) edged lower on Wednesday as investors digested new guidance from the US Commerce Department on AI chip exports to China. Secretary Howard Lutnick confirmed that Nvidia must strictly adhere to licensing terms for its advanced AI chips, including the H200, under a framework coordinated with the State Department.
The tighter oversight follows a trade truce between the US and China last October, which temporarily delayed some export restrictions. Despite the delay, Nvidia has yet to agree to all proposed conditions, such as “know-your-customer” protocols designed to prevent its chips from being used for military purposes. Lutnick deferred questions on China’s compliance to presidential authority, underscoring the complex geopolitics surrounding the deal.
Investors reacted cautiously, sending Nvidia shares slightly lower in midday trading, reflecting concerns about potential hurdles in its China sales channel.
Case-by-Case Export Reviews Introduced
The new policy transforms US export controls from a blanket “presumption of denial” into a more flexible, case-by-case licensing system. Under these rules, Nvidia is required to submit detailed certifications to qualify for exports.
The company must show that the total processing performance (TPP) of chips shipped to China or Macau does not exceed 50% of equivalent shipments to US customers. It also must ensure that these exports do not disrupt domestic orders or divert global production intended for American buyers.
Additionally, before any shipment, Nvidia must obtain verification from independent third-party laboratories confirming that the exported chips meet the license conditions. This rigorous nine-point process is designed to protect US national security while still allowing Nvidia to serve the Chinese AI market, though the added compliance requirements may slow shipments and put near-term revenue under pressure.
China’s AI Ambitions Unaffected?
While the US rules are intended to restrict China’s access to high-performance AI chips, analysts caution that the impact may be limited. According to the Center for a New American Security (CNAS), China could still obtain computing power equivalent to nearly 900,000 H200 chips, roughly double its expected domestic production in 2026.
Nvidia must live with guardrails around its AI chip sales to China, Lutnick says https://t.co/Y8UZmqT2LD https://t.co/Y8UZmqT2LD
— Reuters (@Reuters) February 11, 2026
CNAS notes that the licensing framework could encourage chipmakers to seek approval for even more advanced chips in the future. Moreover, prioritizing US supply may prove difficult during global shortages, particularly of High Bandwidth Memory (HBM), a critical component used in many AI accelerators. These factors suggest that China’s AI development could continue apace despite tighter US controls.
Market Implications and Investor Outlook
For investors, Nvidia’s modest stock decline reflects uncertainty over compliance, supply-chain constraints, and geopolitical risk. Analysts warn that implementation of the licensing rules may create delays in shipments, potentially affecting Nvidia’s quarterly revenue.
At the same time, Nvidia remains a central player in the global AI chip market. Any future licensing approvals could open significant sales opportunities in China, a key growth market, while navigating regulatory hurdles. Market watchers are also keeping an eye on potential US shortages of memory and production capacity, which could influence both domestic and export sales.
In the near term, Nvidia’s stock may continue to react to headlines about licensing approvals and US-China trade developments. Long-term investors are focused on the company’s ability to balance compliance with growth ambitions in one of the fastest-growing segments of the semiconductor industry.
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