By Britney Nguyen and Emily BaryNvidia previously pegged lost China revenue at $8 billion a quarter, and that was for a scaled-down chipNvidia CEO Jensen Huang recently lamented pressure from both the U.S. and China, which has limited the company's ability to do business in China.The latest twist in Nvidia's China saga? President Donald Trump's new post saying that he'll allow chip sales to China as long as the U.S. government gets a 25% cut of business.Trump first teased an arrangement in August, though then the government was to receive 15% of associated revenue. Nonetheless, Nvidia (NVDA) CFO Colette Kress said on the company's latest earnings call that &#34;sizable purchase orders never materialized...due to geopolitical issues and the increasingly competitive market in China.&#34;Now the president has said that he informed President Xi Jinping of the policy on Monday, and China's leader &#34;responded positively.&#34;Nvidia shares were up 2% in Monday's extended session.See also: Nvidia's stock is almost historically cheap - and that's a good sign for bullsFor Nvidia, Trump said the policy would apply just to the company's H200 chip, which is part of the company's older Hopper lineup. &#34;Customers are already moving forward with their incredible, highly advanced Blackwell chips, and soon, Rubin, neither of which are part of this deal,&#34; Trump said in a post on Truth Social.Trump also noted that similar agreements, through which companies would have to pay the U.S. government 25% of their China revenue, would apply to Advanced Micro Devices (AMD), Intel (INTC) and &#34;other&#34; players.AMD's stock was up 1.5% in Monday's extended trading, while Intel shares were up fractionally.If Nvidia indeed is allowed to move forward with the sale of its chips in China, the opportunity could be sizable. Back in May, after the U.S. government said it was restricting chip sales to China, Nvidia estimated that it would lose out on $8 billion in revenue due to export controls.Read: Why AMD's stock is this analyst's best idea for chip investors next yearAnd those were estimates for the H20, a scaled-back version of the Hopper lineup that had been retrofitted to comply with prior export restrictions. Trump's Monday post referenced plans to allow sales of the H200, which is a more powerful chip than the H20, and has been used by companies such as OpenAI and Meta Platforms (META) for training advanced AI models.Nvidia has been excluding China estimates from its financial projections as the situation evolves.While Trump's approval of the H200 is one less hurdle for Nvidia to worry about as it tries to re-enter the Chinese market, the chip maker is now facing a growing challenge from within the country itself. The Chinese government has encouraged local companies to reduce reliance on Nvidia and other Western chip makers, and instead build on Chinese hardware.Major Chinese tech companies including Alibaba Group Holding (BABA) and ByteDance were told by the country's internet regulator to not use Nvidia's specially-designed RTX Pro 6000D chip, the Financial Times reported in September.And CEO Jensen Huang said at a talk last week that he thinks Nvidia is &#34;the first company in history that has been banned on both sides.&#34;China's restrictions on Nvidia could come down to two things, Richard Windsor, founder of research firm Radio Free Mobile, said in a note last week.For one, the country could be trying &#34;to gain negotiating leverage over the USA,&#34; Windsor wrote, noting that Nvidia and AMD are missing out on a major market - a fact both companies have been vocal about. Therefore, Windsor said, the chip makers would be more compelled to pressure the White House to sell chips to China, which is what China wants. The second reason, Windsor said, could be that China really does want to be independent from the U.S., and in that case, any licensed chips will not be allowed for purchase by Chinese companies.&#34;We think that only a change of heart by President Xi can alter this trajectory,&#34; Windsor said at the time.But even if China can build and develop highly competitive AI models, Windsor said they &#34;will be larger, more power hungry and much more expensive to deploy than&#34; a comparable systems from Nvidia or AMD.In his view, China can't compete with the U.S. on pricing, &#34;and it is the economics that will decide which version non-affiliated countries adopt most of the time.&#34;Don't miss: 'China's Nvidia' shows that the global chip race is heating up as it basks in post-IPO glow-Britney Nguyen -Emily BaryThis content was created by MarketWatch, which is operated by Dow Jones &amp; Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.(END) Dow Jones Newswires12-08-25 1812ET

NVDA

NVDL

07788

07388

NVDY

NVDD

NVDX

NVDQ

SOXL

Nvidia's stock rose 2% after Trump announced a policy allowing chip sales to China with a 25% revenue cut for the U.S. government. This applies to Nvidia's H200 chip, potentially reversing an $8 billion revenue loss. However, Nvidia faces challenges as China encourages local companies to reduce reliance on Western chips. AMD and Intel stocks also saw slight increases.

- Nvidia faces challenges in the Chinese market due to U.S. and Chinese government pressures, with CEO Jensen Huang noting limited business opportunities.  
- President Trump's recent announcement allows Nvidia to sell its H200 chip in China, contingent on a 25% revenue cut to the U.S. government, which could potentially recover lost revenue estimated at $8 billion.  
- However, Nvidia is also contending with China's push for local chip production, as major tech firms are advised to reduce reliance on Western suppliers, complicating its market re-entry.

Dow Jones

NVIDIA

GraniteShares 2x Long NVDA Daily ETF

XL2CSOPNVDA

XI2CSOPNVDA

YieldMax NVDA Option Income Strategy ETF

Direxion Daily NVDA Bear 1X ETF

T-Rex 2X Long NVIDIA Daily Target ETF

T-Rex 2X Inverse NVIDIA Daily Target ETF

Direxion Semicon Bull 3X

Nvidia's stock rises as Trump blesses China sales. Here's how big the opportunity could be.