TLDR

• Nvidia stock fell 1.4% to $177.74 as H200 chip export negotiations with the Trump administration remain stuck over Know-Your-Customer requirements and other licensing conditions.
• The U.S. signaled approval for ByteDance’s chip purchase two weeks ago, but commercially practical terms have not been finalized.
• Nvidia warns restrictive conditions could drive Chinese customers to foreign chip suppliers as China has already granted preliminary approval to ByteDance, Tencent, Alibaba, and Deepseek.
• Stock trades below key resistance levels at $182-$184 with critical support at the 200-day moving average near $168.
• Commerce Department’s January 15 regulation requires third-party lab testing and rigorous customer screening to prevent military access.

Nvidia shares dropped 1.4% to $177.74 on February 5 as the chipmaker’s negotiations with the Trump administration over H200 AI chip exports remain unresolved. The regulatory uncertainty is weighing on investor sentiment as both sides work to finalize commercially viable licensing terms.

NVIDIA Corporation, NVDA

The Trump administration indicated roughly two weeks ago it would approve ByteDance’s license to purchase H200 chips. However, Nvidia has not agreed to the proposed conditions. The main sticking point involves Know-Your-Customer procedures designed to prevent Chinese military entities from accessing advanced AI technology.

Nvidia clarified its position through a spokesperson. “We aren’t able to accept or reject license conditions on our own,” the company said. “Although KYC is important, KYC is not the issue. For American industry to make any sales, the conditions need to be commercially practical, else the market will continue to move to foreign alternatives.”

Regulatory Framework Takes Shape

The Commerce Department published new regulations on January 15 that formally loosened licensing policy for advanced AI chips. But the framework includes strict requirements. Applicants must certify their customers will implement rigorous screening procedures to prevent unauthorized remote access.

Companies must also provide lists of remote users connected to countries of concern including Iran, Cuba, and Venezuela. A U.S. third-party lab must test the chips before shipment. This testing requirement is viewed as the mechanism for collecting the U.S. government’s 25% fee on sales.

President Trump announced the chip export arrangement in December. The same terms apply to comparable chips from Advanced Micro Devices and Intel. China hawks criticized the decision as a national security risk.

China has granted preliminary approval to ByteDance, Tencent, Alibaba, and AI startup Deepseek to import the chips. Regulatory conditions on China’s side are still being finalized.

Technical Picture Shows Weakness

Nvidia stock is trading below its 20-day moving average at $184 and 50-day moving average at $182. Both levels now act as resistance zones. The 200-day moving average near $168 represents the key support level that would preserve the broader uptrend.

The Relative Strength Index sits in the low 30s, approaching oversold conditions without confirming a reversal. Volume has been moderate during the decline, suggesting a corrective move rather than panic selling.

Near-Term Outlook

Analysts expect Nvidia to trade in a $170 to $185 range until regulatory clarity emerges. A break above $185 would require positive developments on export approvals or strength across the AI sector. That could push shares toward $195-$200.

One source indicated some chips are likely to reach China before Trump’s planned April meeting with Chinese President Xi Jinping. The Commerce Department typically circulates pending licenses to State, Defense, and Energy departments before finalizing terms.

Nvidia emphasized it serves as an intermediary between U.S. regulators and end customers. The company cannot unilaterally modify license conditions but can provide feedback on commercial viability. The prolonged approval process has delayed H200 orders as Chinese customers await clarity on national security requirements.