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Trump administration eases restrictions on Nvidia chip sales to China
U.S. President Donald Trump announced on Monday that Nvidia will be allowed to supply its H200 AI chips to "approved customers" in China, marking a shift in the ongoing tech rivalry between Washington and Beijing.
Policy reversal follows lobbying by Nvidia CEO
Trump's decision, shared via social media, applies to other U.S. semiconductor firms like AMD and comes after intense advocacy by Nvidia's CEO, Jensen Huang, who met with officials in Washington last week. The move aims to balance national security concerns with economic interests, Trump stated, emphasizing the need to "protect National Security, create American Jobs, and keep America's lead in AI."
Nvidia welcomes decision amid geopolitical tensions
Nvidia, the world's most valuable chipmaker, has been at the center of U.S.-China tech disputes. In July, Trump lifted a ban on advanced chip sales to China but required Nvidia to pay 15% of its Chinese revenue to the U.S. government. Beijing responded by reportedly instructing local tech firms to avoid purchasing Nvidia's chips tailored for the Chinese market.
"We applaud President Trump's decision to allow America's chip industry to compete to support high-paying jobs and manufacturing in America," Nvidia said in a statement.
Nvidia
H200 chips: A step behind Nvidia's cutting-edge technology
The H200, while advanced, lags behind Nvidia's latest Blackwell chip, considered the most powerful AI semiconductor available. Huang had previously argued that restricting access to such technology could push China to accelerate its own chip development, narrowing the gap with the U.S.
Financial and geopolitical implications
Nvidia's shares rose modestly following the announcement. Trump claimed that 25% of revenues from these sales would be paid to the U.S., though the White House has yet to clarify the arrangement. Analysts suggest the move could ease supply chain disruptions and provide leverage in negotiations over rare earth minerals, where China holds a dominant position.
However, national security experts warn that easing restrictions may aid China's military advancements. Researchers at Georgetown University's Center for Security and Emerging Technology (CSET) noted that China's military is already using U.S.-designed chips to develop AI-driven capabilities.
"By making it easier for the Chinese to access these high-quality AI chips, you enable China to more easily use and deploy AI systems for military applications," said Cole McFaul, senior research analyst at CSET.
Cole McFaul, CSET
China's push for self-reliance continues
Despite the relaxation, Beijing is expected to persist in reducing dependence on U.S. technology. Earlier, Chinese authorities had discouraged local firms from purchasing Nvidia's older H20 chips, favoring domestic alternatives. Analyst Alex Capri from the National University of Singapore described the policy shift as a temporary measure to "buy time" for broader negotiations.
