US President Donald Trump has cleared the way for tech giant Nvidia to sell its advanced H200 chips to China as part of a major easing of Washington’s export restrictions on Chinese technology products.
President Trump said on Monday that he had informed Chinese President Xi Jinping of his decision to allow chip exports under an arrangement that would pay 25% of sales to the U.S. government.
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President Trump said his administration would take a “similar approach” to other semiconductor manufacturers, including AMD and Intel, saying exports would be allowed to “approved customers” under conditions that protect national security.
“This policy will support American jobs, strengthen American manufacturing, and benefit American taxpayers,” President Trump said on Truth Social.
Santa Clara, Calif.-based Nvidia said the move is “thoughtfully balanced” and will “support high-wage jobs and manufacturing in the United States.”
Nvidia stock rose more than 2% in after-hours trading on the news.
President Trump’s announcement marks a major departure from former President Joe Biden’s administration’s policy of restricting Nvidia and other chipmakers from exporting downgraded versions of products designed specifically for the Chinese market.
In a post on Truth Social, President Trump criticized the Biden administration’s approach, claiming it led to American tech companies spending billions of dollars on downgraded products that “nobody wanted.”
The H200, due out in 2023, is NVIDIA’s most powerful chip outside of the latest generation Blackwell series, and President Trump acknowledged that it will continue to be restricted to the Chinese market.
Although the H200 is not Nvidia’s most advanced chip, it is nearly six times more powerful than the previous generation H20 chip, according to the Institute for Progress, a nonpartisan Washington-based think tank.
Under an agreement with the Trump administration announced in August, Nvidia agreed to pay the U.S. government 15% of revenue from sales of H20, which is designed to comply with regulations imposed on the Chinese market.
Tilly Zhang, a China technology expert at Gabekal Dragonomics, said Trump’s decision reflects “market realities” and intense lobbying by Nvidia CEO Jensen Huang.
“The priority is to move away from purely blocking or slowing China’s technological progress to competing for market share and securing commercial interests in selling unique technology solutions,” Zhang told Al Jazeera.
As blocking China’s technological advances becomes increasingly unrealistic, “grabbing more market share and revenue is becoming more of a priority,” Zhang said.
“That’s what this U.S. move is sending a signal to me.”
Zhang said the competition between China and the US to dominate artificial intelligence has shifted from export restrictions to market competition.
“It could push chipmakers on both sides toward faster innovation and create more market dynamics,” she said.
President Trump’s announcement was quickly criticized by Democratic lawmakers.
Sen. Elizabeth Warren, representing Massachusetts, accused the Trump administration of “selling out America’s national security.”
“President Trump is having NVIDIA export cutting-edge AI chips that his own Justice Department has revealed are illegally smuggled into China,” Warren wrote in X, referring to multiple investigations conducted by the U.S. Department of Justice into illegal chip shipments.
“His own Justice Department called these chips ‘building blocks for AI superiority.'”
Chris McGuire, a senior fellow at the Council on Foreign Relations, said President Trump’s actions were a blow to U.S. efforts to stay ahead of China in the race for AI supremacy.
McGuire, who worked on technology policy in the Biden White House, told Al Jazeera: “Relaxing export restrictions on AI chips will help Chinese AI companies close the gap with the frontier U.S. AI model, and will allow Chinese cloud computing providers to build ‘enough’ data centers around the world.”
“This risks undermining the administration’s efforts to ensure the U.S. AI stack has global dominance.”
