Nvidia on Thursday said the U.S. government will allow it to continue developing its H100 artificial intelligence chip in China. It’s a win for the company after it warned Wednesday that new export restrictions could hamper its operations in the country.

Nvidia said in an SEC filing Wednesday that the U.S. government is restricting sales of high-performance AI chips for servers, the A100 and H100, to China and Russia. Sales of both chips are still restricted in those markets, though it can still develop the H100 in China. Nvidia expects a $400 million hit to revenue in the current quarter from new export restrictions.

The company’s stock fell nearly 9% in trading Thursday.

“The U.S. government has authorized exports, reexports, and in-country transfers needed to continue NVIDIA Corporation’s, or the Company’s, development of H100 integrated circuits,” Nvidia said in a filing Thursday.

The Biden administration is working to limit U.S. exports of certain semiconductors and equipment because of fears that Chinese companies could use them for military purposes. Graphics processors like the kind that Nvidia and Advanced Micro Devices make are well suited for artificial intelligence applications that could include weapons development, facial recognition and other military uses.

The H100 is Nvidia’s upcoming enterprise AI chip that was previously expected to ship by the end of the year. Part of its development takes place in China. The A100 is an older model that has been shipping for three years. They are both graphics processors that can be used for supercomputing and artificial intelligence.

Nvidia’s data center business, which includes sales of the A100 and H100, is one of the fastest-growing parts of the company, reporting $3.8 billion in sales in the June quarter, a 61% annual increase.

However, Nvidia CEO Jensen Huang warned analysts in August that Chinese cloud companies were slowing down building out their data centers and that China was a “very large market” for the company. Nvidia said Thursday that it can continue to ship AI chips from its Hong Kong facility through September 2023.

“The Chinese hyperscalers and the Chinese Internet companies really, really slowed down infrastructure investment this year, particularly starting in — they’ve been rather slow in building out and really accelerate — well, really slowed down in Q2,” Huang said.

Some analysts believe that Nvidia can ameliorate the impact of the new export restrictions by working with the government, although it’s unclear whether the Chinese government might retaliate with its own bans.

“While there are potential near and intermediate term risks from the export ban, Nvidia is working closely with the [U.S. government] to navigate through the situation and we believe the USG is fully aware of the critical/strategic importance of Nvidia’s accelerated compute platform to the global tech industry,” JPMorgan analyst Harlan Sur wrote in a note Thursday.

The Department of Commerce said the new export restrictions are related to national security, but it didn’t answer follow-up questions about whether it clarified or changed the policy for Nvidia.

“While we are not in a position to outline specific policy changes at this time, we are taking a comprehensive approach to implement additional actions necessary related to technologies, end-uses, and end-users to protect U.S. national security and foreign policy interests,” a Department of Commerce representative said Wednesday.

AMD also said Wednesday that it received new license requirements from the Department of Commerce, but did not expect them to materially affect its business because of lower China exposure. Shares of AMD fell more than 4% during trading Thursday.