Trump lets Nvidia sell its AI chips to China
The product, known as a H20 chip, is used in cutting-edge data centers which train AI models and operate AI applications. It was designed for Chinese customers and was a top seller last year, until Trump's commerce department restricted sales in April, costing Nvidia billions of dollars. However, the catch is that the H20 chip isn't the most advanced AI chip Nvidia sells, and the company is still being held back from selling its best technology in China.
This is due to fears that granting full access to America's most cutting-edge technology to the superpower could pose a national security risk. Huang said Nvidia would resume deliveries of the H20 chip in China once the Commerce Department processes the company's export license for it. The Trump administration is also considering granting permission for other AI chip manufacturers, including Nvidia competitor Advanced Micro Devices (AMD) to resume sales in China.
'We were recently informed by the Department of Commerce that license applications to export MI308 products to China will be moving forward for review,' AMD founder Patrick Moorhead announced on X. 'We plan to resume shipments as licenses are approved. We applaud the progress made by the Trump administration in advancing trade negotiations and its commitment to US AI leadership.' Huang said Nvidia has also developed a new AI chip for use in Chinese factory automation and logistics.
The chip uses Nvidia's most advanced set-up - called Blackwell architecture - but it has been downgraded in some ways to address US officials' concerns about exports to China, sources told the WSJ. Ahead of Huang's trip to Beijing, US Senators Jim Banks (R., Ind.) and Elizabeth Warren (D., Mass.) penned a letter to Huang asking him to refrain from meeting with companies which are working with military or intelligence firms in China. 'We are worried that your trip to the PRC could legitimize companies that cooperate closely with the Chinese military or involve discussing exploitable gaps in the U.S export controls,' the senators wrote.
'We request that you refrain from meeting with representatives of any companies that are working with the PRC's military or intelligence establishment, are named on the Entity List, or are suspected to have engaged in activities that undermine export controls.' 'There is a new bipartisan consensus that the hardware powering advanced AI, which includes NVIDIA graphics processing units (GPUs), is of immense strategic importance,' the letter added. 'If exported freely to the PRC, this hardware could accelerate the PRC's effort to modernize its military.'
The letter added that Nvidia's chips could be used by Chinese companies, including DeepSeek, to smuggle sensitive technology in violation of US law. 'We hope you will agree that it would be deeply irresponsible for an American CEO to meet with companies that violate U.S. law and are actively developing military capabilities that could undermine U.S. national security,' the senators said. The surprise move by the Trump administration to allow Nvidia to sell the H20 chips on Beijing's markets comes amid ongoing trade tensions between the US and China.
China and the US have been tussling over rare earth metals which are used to make magnets, defense products and electronics, since 2018. The tensions ramped up this year when Trump increased tariffs on China by 10 percent during his first weeks back in the White House. Chinese leader Xi Jinping responded with a 15 percent tariff on coal and liquified natural gas products, and various tariffs on machinery and cars.
The tit-for-tat tariffs escalated over several weeks, until May 12, when the superpowers agreed to reduce tariffs in an effort to de-escalate the trade war. On June 11, the White House said a trade deal with China had been reached , with baseline tariffs set at 10 percent by China and 30 percent by the US. Both countries made concessions, with the US agreeing to resume accepting Chinese students into American colleges, and China to resume shipments of rare earths.
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