Key Points
- The Trump administration has approved the sale of Nvidia’s H200 AI chips to China. Sales will be subject to a 25% fee and additional conditions.
- This reverses the Biden administration’s policy, which had banned such sales.
- The administration argues that the sales will discourage China from developing its own advanced chips.
- Critics worry the chips will boost China’s military and erode the U.S. advantage in AI.
The Trump administration has officially authorized Nvidia to begin selling its second-most powerful AI chips to China. The new rules, released on Tuesday, will likely kick off shipments of the H200 chip, a move that has already drawn significant criticism from China hawks in Washington.
The decision marks a major reversal of the Biden administration’s policy, which had banned the sale of advanced AI chips to China due to national security concerns. President Trump announced last month that he would allow the sales, but with a catch: a 25% fee on every chip sold.
The new regulations set out additional conditions. The chips will have to be reviewed by a third-party lab to confirm their technical capabilities. China cannot receive more than 50% of the total number of chips sold to American customers. Chinese buyers must demonstrate that they have “sufficient security procedures” in place and cannot use the chips for military purposes.
The Trump administration, led by White House AI czar David Sacks, is arguing that this is a smart strategic move. They believe that allowing China to purchase these advanced chips will discourage Chinese companies like Huawei from developing their own, even more advanced designs.
Critics, however, remain unconvinced. They worry that the chips will supercharge Beijing’s military and erode America’s advantage in artificial intelligence. For now, it appears the Trump administration is willing to take that risk in exchange for revenue from the 25% fee and the potential to slow China’s chip development.
