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

Donald Trump has cleared the way for Nvidia to begin selling its powerful AI computer chips to China, marking a win for the chip maker and its CEO Jensen Huang, who has spent months lobbying the White House to open up sales in the country.Before Monday’s announcement, the US had prohibited sales of Nvidia’s most advanced chips to China over national security concerns.“I have informed President Xi, of China, that the United States will allow Nvidia to ship its H200 products to approved customers in China, and other Countries, under conditions that allow for continued strong National Security,” Trump posted to Truth Social on Monday. “President Xi responded positively!”Trump said the Department of Commerce is finalising the details and that he was planning to make the same offer to other chip companies, including Advanced Micro Devices (AMD) and Intel. Nvidia’s H200 chips are the company’s second-most powerful, and far more advanced than the H20, which was originally designed as a lower-powered model for the Chinese market, which wouldn’t breach restrictions, but which was the US banned anyway in April.The president said the US would receive 25% of the proceeds, more than the 15% previously agreed to with Nvidia in an earlier deal to lift restrictions, and following similar unorthodox plans for the federal government to take a financial cut from private business dealings. In August, Trump said the US would receive a 10% stake in the tech company Intel. Some lawmakers have questioned the legality of such arrangements.According to the Hill, Democratic senators Elizabeth Warren of Massachusetts and Andy Kim of New Jersey sent a letter to commerce secretary Howard Lutnick last week, outlining their concerns with selling these chips to China and saying it risked powering the country’s “surveillance, censorship, and military applications”.“I urge you to stop ignoring the input of bipartisan members of Congress and your own experts in order to cut deals that trade away America’s national security,” the senators wrote.On social media, Warren called for Huang to appear before Congress to testify under oath.Huang has worked closely with Trump since the inauguration, and has made several trips to the White House. The CEO attended the president’s AI summit in July, met with Trump as recently as last week and was even a guest at the White House dinner for the Saudi crown price Mohammed bin Salman. Huang has also pledged to invest $500bn in AI infrastructure in the US over the next four years.Huang has also visited China several times, meeting with officials and Chinese tech executives, as US bans were variously lifted and reintroduced. Earlier this year, China imposed its own controls on the imports of Nvidia chips, with top tech firms reportedly instructed to cancel orders, citing national security concerns and confidence in China’s domestic chip development.In October Huang said Nvidia has gone from having 95% of the Chinese market to having 0%, and called the bans a “strategic mistake”.Now, selling chips to China – the world’s second-largest economy – could mean a windfall worth billions of dollars for Nvidia, which is already valued at $4.5tn.“We applaud President Trump’s decision,” said a Nvidia spokesperson. He added that offering the H200 chips “to approved commercial customers, vetted by the Department of Commerce, strikes a thoughtful balance that is great for America”.The Nvidia spokesperson and Trump said the move would support US jobs and manufacturing. In his Truth Social post, Trump condemned the Biden administration’s policies, which imposed strict export controls on powerful chips. The Biden administration had said withholding such technology from China bolstered US competition, protected national security and hampered AI development in China.“That Era is OVER!” Trump wrote. “My Administration will always put America FIRST.” .Chinese authorities were yet to respond to the announcement. Ma Jihua, a telecom industry analyst, told state media outlet, the Global Times, that years of US curbs on AI exports had “provided a rare chance of China’s domestic chip industry to grow and catch up”.