US to Review Nvidia AI Chip Sales to China
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The US President Donald Trump’s administration has launched a review that could result in the first shipments to China of Nvidia's second-most powerful AI chips, making good on his pledge to allow the controversial sales, according to reports
Reports claim that Trump said that he would allow sales of H200 chips to China, with the US government collecting a 25 percent fee, and that the sales would help keep US firms ahead of Chinese chipmakers by cutting demand for Chinese chips.
The move drew fire from China hawks across the US political spectrum over concerns the chips would supercharge Beijing's military and erode the US advantage in artificial intelligence.
But questions have remained about how quickly the US might approve such sales and whether Beijing would allow Chinese firms to purchase the Nvidia chips.
The US Commerce Department, which oversees export policy, has sent license applications for the chip sales to the State, Energy and Defense Departments for review, reports claim. Those agencies have 30 days to weigh in, according to export regulations.
The Biden administration had imposed a raft of restrictions on advanced AI chip sales to China and countries it feared could become conduits for smuggling into the rival nation, citing national security fears.
Trump's move represents a departure from that policy and a dramatic reversal from his first term, when he drew international attention by cracking down on Chinese access to US technology. Back then, he cited claims that Beijing steals American intellectual property and harnesses commercially obtained technology to bolster its military, which Beijing denies.
Exporting large numbers of the chips to China would be "a significant strategic mistake," says Chris McGuire, a former White House National Security Council official under President Joe Biden and senior fellow with the Council on Foreign Relations. McGuire described the chips as "the one thing holding China back in AI."
"I cannot possibly fathom how the departments of Commerce, State, Energy, and Defense could certify that exporting these chips to China is in the U.S. national security interest,” he says.
Led by White House AI czar David Sacks, several members of the Trump administration now argue that shipping advanced AI chips to China discourages Chinese competitors like Huawei from redoubling efforts to catch up with Nvidia's and AMD's (AMD.O).
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Last week reports indicated that Nvidia was considering an increase in production of the H200, the immediate predecessor to its current flagship Blackwell chips, after initial orders from China outstripped the current capacity.
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While the H200 chips are slower than Nvidia’s Blackwell chips at many AI tasks, they remain in wide use in the industry and have never been allowed for sale in China.
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Trump had previously opened the door to sales of a less-advanced version of Nvidia's Blackwell chips, its cutting-edge offering, but backed away from the move and approved sales of the H200 instead.