Nvidia AI Chip Sale to ByteDance Tied to Trump Conditions
The Trump administration is prepared to permit China’s ByteDance to purchase Nvidia’s H200 chips, but the AI chipmaker has yet to accept the proposed usage conditions, according to reports.
The US said it would approve the license about two weeks ago, but Nvidia has not accepted the US government's Know-Your-Customer (KYC) requirement as now drafted - to ensure China's military does not access the chips - among other conditions.
More broadly, Nvidia is negotiating with the US over the terms of licenses to ship its H200 AI chips to companies in China.
Nvidia said it was an intermediary between the U.S. government and potential customers that would have to comply with the US restrictions
Nvidia and its Chinese customers have once again found themselves caught in the crossfire of the US-China tech war. China has already granted preliminary approval to three of its largest tech companies - ByteDance, Tencent, and Alibaba - along with AI startup Deepseek to import the chips, though the regulatory conditions for China's approvals also are still being finalized.
This news from the U.S. side represents the latest twist on whether China will get chip shipments first promised by President Donald Trump in early December, with a 25 percent cut to the US government. The same arrangement applies to similar chips from firms such as Advanced Micro Devices and Intel.
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Trump's decision was decried by China hawks, who viewed it as a risk to national security, and fear that China will use the chips to strengthen its military capabilities.
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Earlier last month, the Commerce Department issued a regulation formally loosening the licensing policy for the chips, but stipulating conditions. For example, it said the applicant had to certify and provide data to support that its customer will use "rigorous" Know Your Customer procedures to screen and prevent unauthorized remote access. In addition, it is required to provide a list of remote users tied to companies in Iran, Cuba, Venezuela and other countries of concern.
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Before the chips could go to China, a US third-party lab also is required to test the chips to ensure they meet specifications, a requirement viewed by many as a way for the US to collect its 25 percent fee.