Key Points
- The U.S. government will allow Nvidia to sell its H200 AI chips to China. A 25% fee, paid to the U.S. government, will be applied to each chip sold.
- President Trump announced the deal to maintain America’s lead in AI while protecting national security.
- The decision is highly controversial, with critics fearing it will strengthen China’s military.
- It is unclear whether China will buy the chips amid its push for technological self-reliance and fears of U.S. backdoors.
The Trump administration is giving Nvidia the green light to sell its powerful H200 artificial intelligence chips to China. Still, with a major catch: the U.S. government will collect a 25% fee on every chip sold. The move attempts to settle a fierce debate over whether the U.S. should sell advanced technology to its main economic rival.
President Donald Trump announced the decision himself on his Truth Social platform on Monday. He said he had informed Chinese President Xi Jinping of the move and that he “responded positively.” The news sent Nvidia’s stock up 2% in after-hours trading. The same policy will apply to other chipmakers, such as AMD and Intel.
The decision is a strategic compromise. Administration officials believe that allowing the sale of the H200—a powerful but not top-of-the-line chip—keeps U.S. companies dominant in the global market. They feared that a complete ban would only accelerate China’s efforts to develop its own domestic AI chips, ultimately strengthening competitors like Huawei.
Nvidia’s most advanced chips, such as the Blackwell and the upcoming Rubin series, are not part of the deal and remain off-limits to China.
However, the decision is already facing harsh criticism. China hawks in Washington and several Democratic senators are blasting the move, calling it a “terrible mistake” and a “colossal economic and national security failure.” They worry that giving China access to these powerful chips will help modernize its military.
It also remains unclear whether Chinese firms will even buy the chips, as Beijing has been pushing companies to avoid U.S. technology due to security concerns.
