China just handed Nvidia a major win in the ongoing chip war. Beijing approved domestic tech giants ByteDance, Alibaba, and Tencent to purchase Nvidia's H200 AI systems, according to a Reuters report Wednesday morning, reversing months of pressure on Chinese companies to buy local alternatives. The approval sent Nvidia shares up 1.6% in premarket trading and triggered a broader semiconductor rally, with the VanEck Semiconductor ETF jumping more than 3% as investors digest what could be billions in recovered revenue for the AI chip giant.
Nvidia just got the regulatory break it's been waiting months for. China approved sales of the company's H200 AI chip systems to major domestic tech players, according to Reuters sources, marking a significant thaw in the escalating semiconductor trade tensions between Washington and Beijing. The approval covers ByteDance, Alibaba, and Tencent - three of China's most influential tech companies with massive AI infrastructure needs.
The market responded instantly. Nvidia shares climbed 1.6% in premarket trading Wednesday, while the broader chip sector caught fire. The VanEck Semiconductor ETF shot up more than 3%, with European semiconductor stocks like ASML surging 5% and other chipmakers including Infineon and STMicroelectronics trading solidly in the green.
This reversal carries serious financial weight. Back in May 2025, Nvidia warned investors that export restrictions to China would cost the company roughly $8 billion in lost sales - a staggering hit even for a trillion-dollar company. While the U.S. had authorized H200 sales earlier this year, Beijing was reportedly pressuring Chinese firms to choose domestic alternatives instead, threatening to lock Nvidia out of one of its most lucrative markets.
