Trump clears way for Nvidia to sell powerful AI chips to China

Essential brief

Key facts

Trump authorized Nvidia to sell advanced H200 AI chips to China, easing Biden-era restrictions.

The US will receive 25% of proceeds from these sales, increasing government financial involvement in private deals.

Some lawmakers warn the sales risk enhancing China’s surveillance and military capabilities.

Nvidia CEO Jensen Huang has actively lobbied for the policy change and plans major US AI investments.

China may still limit chip access to protect its domestic industry despite the new US policy.

Highlights

Trump authorized Nvidia to sell advanced H200 AI chips to China, easing Biden-era restrictions.

The US will receive 25% of proceeds from these sales, increasing government financial involvement in private deals.

Some lawmakers warn the sales risk enhancing China’s surveillance and military capabilities.

Nvidia CEO Jensen Huang has actively lobbied for the policy change and plans major US AI investments.

Former President Donald Trump has authorized Nvidia to sell its advanced H200 AI chips to China, easing restrictions imposed during the Biden administration.

Previously, the US banned sales of Nvidia's top-tier chips to China over national security concerns.

Trump announced on Truth Social that the Department of Commerce is finalizing a deal allowing Nvidia to ship H200 products to approved Chinese customers under conditions that maintain US national security.

He also indicated plans to extend similar offers to other chipmakers like AMD and Intel.

Nvidia’s H200 chips are significantly more powerful than the earlier H20 model, which was designed to comply with restrictions but was banned regardless.

The US government will receive 25% of the proceeds from these sales, an increase from the 15% initially agreed upon with Nvidia.

This financial stake arrangement is part of a broader, unconventional approach by the federal government to benefit from private sector deals, with Trump previously announcing a 10% US stake in Intel.

However, some lawmakers, including Democratic Senators Elizabeth Warren and Andy Kim, have raised legal and security concerns, warning that these chips could enhance China’s surveillance, censorship, and military capabilities.

Nvidia CEO Jensen Huang, a close Trump ally, has lobbied extensively for this policy shift and pledged a $500 billion investment in US AI infrastructure over the next four years.

Despite US bans, China has imposed its own import controls on Nvidia chips, encouraging domestic development.

Huang criticized the bans as a “strategic mistake” that caused Nvidia to lose nearly all its Chinese market share.

The deal could yield billions for Nvidia, valued at $4.5 trillion, and is seen by the company as balancing commercial opportunity with national security.

China’s government has acknowledged the reports but may still restrict H200 chip access to prioritize domestic tech growth.

Analysts note that US export curbs have inadvertently accelerated China’s chip industry development.

This development marks a significant shift in US-China tech relations amid ongoing geopolitical tensions over AI technology.