STORY: Nvidia and its Chinese customers are once again caught in the crossfire of the U.S.-China tech war.

A Reuters source says the Trump administration is willing to let Tiktok-owner ByteDance purchase Nvidia's H200 processors, but the chipmaker has not agreed to the proposed conditions.

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The U.S. signaled approval for a license about two weeks ago, but the company has not accepted Know-Your-Customer rules aimed at blocking access by China's military, among other conditions.

In a statement, Nvidia said it cannot accept or reject conditions on its own, and said that any rules must be commercially viable.

Sources say talks with Washington continue over the broader terms for shipping the chips to Chinese customers. 

In mid-January, the Commerce Department loosened its licensing policy.

However, it added new requirements, including strict customer screening and third-party testing in the U.S. before shipments can proceed.

Later that month, Nvidia CEO Jensen Huang discussed the state of play with reporters:

"The goal is to, to balance, to simultaneously achieve national security as well as technology leadership, as well as economic leadership. And every country needs to find that balance and President Trump has found his balance and he encourages us to go back to China with H200 and extend NVIDIA's, extend America's technology leadership and AI leadership."

Neither ByteDance nor the Commerce Department immediately responded to a request for comment.

Beijing has already given preliminary approval for some major tech firms to import the chips.

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One source says at least a few U.S. shipments could move ahead before Donald Trump's expected meeting with Chinese President Xi Jinping in April.