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President Donald Trump’s decision to allow Nvidia to export its H200 chip to China has raised concerns among some security officials and lawmakers over access to advanced technology used for artificial intelligence.
“I informed President Xi (Jinping) 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. President Xi responded positively!” Trump posted on Truth Social on Monday.
“The United States will be paid $25%,” the president said, without giving details of the arrangement.
Trump said the “same approach” to allowing chip exports would apply to rivals such as AMD and Intel.
Nvidia’s sales of advanced chips used for AI to Chinese customers have halted this year amid US export restrictions and Beijing’s backlash against American technology.
A breakthrough in export controls could represent billions of dollars in revenue boost for the chip giant if it goes ahead and China allows its companies to buy them. Nvidia shares rose 1.73 percent on Monday after Semaphore first reported the administration’s decision. After the market closed, its stock increased by another 2 percent.
However, sales of Nvidia chips in China may face opposition in the US Congress and could be hindered by Chinese authorities.
Nvidia Chief Executive Jensen Huang said last week that he was unsure whether China would accept the H200.
Nvidia’s H200 chip is far more powerful than the H20 chip that was made specifically for export to China, but belongs to the previous generation of its technology as it has been replaced by its latest Blackwell chips.
The chip maker previously agreed to pay the U.S. government a 15 percent cut of its revenue from chip sales to China in a deal to resume H20 exports, but that deal was not finalized.
Trump’s announcement comes days after a bipartisan group of senators introduced legislation that would block the administration from approving exports of advanced chips, including the H200, to China for 30 months.
Senators including Republican Pete Ricketts and Democrat Chris Coons said the bill was designed to ensure the US maintains its dominance in AI by depriving China of critical technology.
White House AI czars Huang and David Sachs argue that restricting exports of US chips hurts US companies and efforts to make the world dependent on US AI chips and technology.
Critics say the White House is heavily promoting China in an industry that has significant military applications.
“Selling large numbers of the H200 to China would provide rocket fuel to the Chinese AI industry,” said Chris McGuire, a technology expert at the Council on Foreign Relations who has held senior White House and State Department roles in Joe Biden’s administration.
McGuire said Chinese tech conglomerate Huawei has acknowledged it may not make a better chip than the H200 for at least two years. This will give Chinese AI companies the computing power needed to close the gap with the US.
The decision marks a major shift in approach from the Biden administration, which had imposed sweeping export controls on chip-related technology in an effort to slow China’s military modernization.
It comes as US government agencies have been told not to take action that could anger China as Trump does not want to jeopardize his relationship with Xi and his planned visit to Beijing in April.
The H200, released in 2023, is a more powerful version of the ‘Hopper’ chip that was behind the explosive debut of OpenAI’s ChatGPT in 2022. The Biden administration banned the export of those chips to China.
Hopper Chips continues to sell worldwide and reported $2 billion in revenue in the most recent quarter.
To comply with US export controls, Nvidia has in the past designed lower-performance AI chips specifically for the Chinese market, until new licensing requirements from Washington on its H20 China chip earlier this year.
Beijing has since pressured domestic tech companies not to buy these chips, cutting into Nvidia’s potential revenue by billions of dollars.
Trump wrote on Monday: “The Biden Administration forced our great companies to spend billions of dollars making “degraded” products that no one wanted, a terrible idea that slowed innovation, and hurt American workers. That era is over!”
Last week, Huang said he could not continue to “degrade” chips for the China market, which is unacceptable to both Chinese leadership and businesses.
