The Trump administration has initiated a review of Nvidia’s advanced AI chip sales to China, potentially allowing the export of the company’s second-most powerful processors.
The Trump administration has launched a review that could pave the way for the first shipments of Nvidia’s second-most powerful artificial intelligence chips to China, according to sources familiar with the matter.
Recently, the U.S. eased restrictions on the export of Nvidia’s H200 processors, which are designated as the company’s second-best AI chips. As part of this decision, the U.S. will impose a 25% fee on such sales. However, reports indicate that Beijing is likely to impose limitations on access to these advanced H200 chips, as noted by The Financial Times.
This development raises questions regarding the speed at which the U.S. might approve these sales and whether Chinese firms will be permitted to purchase the Nvidia chips. The U.S. Commerce Department, which oversees export policy, has forwarded license applications for the chip sales to the State, Energy, and Defense Departments for review. Sources who spoke on the condition of anonymity indicated that this process is not public, and those agencies have 30 days to provide their input in accordance with export regulations.
An administration official stated that the review would be comprehensive and “not some perfunctory box we are checking,” as reported by Reuters. Ultimately, however, the final decision rests with Trump, in line with existing regulations.
A spokesperson for the White House emphasized that “the Trump administration is committed to ensuring the dominance of the American tech stack – without compromising on national security.”
The Biden administration had previously imposed restrictions on the sale of advanced AI chips to China and other nations that could potentially facilitate smuggling into the rival country, citing national security concerns.
This latest move by the Trump administration marks a significant shift from earlier policies that aimed to restrict Chinese access to U.S. technology. During his presidency, Trump highlighted concerns that Beijing was stealing American intellectual property and utilizing commercially acquired technology to enhance its military capabilities, claims that the Chinese government has consistently denied.
Critics of the current decision argue that exporting these chips could bolster Beijing’s military capabilities and diminish the U.S. advantage in artificial intelligence. Chris McGuire, a former official with the White House National Security Council under President Joe Biden and a senior fellow at the Council on Foreign Relations, expressed strong reservations. He described the potential export of these chips to China as “a significant strategic mistake,” asserting that they are “the one thing holding China back in AI.”
McGuire further questioned how the departments of Commerce, State, Energy, and Defense could justify that exporting these chips to China aligns with U.S. national security interests.
Conversely, some members of the Trump administration contend that supplying advanced AI chips to China could hinder the progress of Chinese competitors, such as Huawei, in their efforts to catch up with Nvidia and AMD’s advanced chip designs.
Last week, Reuters reported that Nvidia is contemplating increasing production of the H200 chips due to high demand from China. While the H200 chips are generally slower than Nvidia’s Blackwell chips for many AI tasks, they continue to see widespread usage across various industries.
This ongoing review and the potential implications of exporting advanced AI technology to China underscore the complex interplay between trade, technology, and national security in the current geopolitical landscape, as highlighted by various sources.
According to Reuters, the outcome of this review could significantly impact the future of AI chip sales and the broader technology competition between the U.S. and China.