US President Donald Trump’s administration has launched a review that could result in the first shipments to China of Nvidia’s second most powerful AI chips, five sources reported, making good on its promise to allow the controversial sales.
Trump declared this month that he would allow the sale of Nvidia’s H200 chips to China, at a 25% rate to the US government, and that these sales would help US companies stay ahead of Chinese chipmakers by reducing demand for the latter.
The move drew strong criticism from anti-China hawks across the American political spectrum, concerned about the possibility of the chips overburdening Beijing’s military and eroding the American advantage in artificial intelligence.
However, doubts remain about how quickly the US would approve such sales and whether Beijing would allow Chinese companies to buy Nvidia chips.
The US Department of Commerce, which oversees export policy, sent license applications for chip sales to the Departments of State, Energy and Defense for review, the sources said on condition of anonymity because the process is not public.
According to export regulations, these agencies have 30 days to evaluate the situation.
One of the sources, an administration official, emphasized that the review would be comprehensive and not a simple requirement. However, under the regulations, the final decision rests with Trump.
A White House spokesperson did not comment on the review, but said that “the Trump administration is committed to ensuring dominance of the American technology sector, without compromising national security.”
Read more: Nvidia considers increasing production of H200 chips due to strong demand from China
Biden had banned the sale of advanced AI chips to China
The Biden administration imposed a series of restrictions on the sale of advanced AI chips to China and countries it feared would become smuggling channels to the rival country, citing national security fears.
Trump’s move represents a radical change from his first term, when he attracted international attention by restricting China’s access to American technology.
At the time, he cited accusations that Beijing steals American intellectual property and uses commercially obtained technology to bolster its military, something Beijing denies.
Exporting large quantities of chips to China would be “a significant strategic mistake,” said Chris McGuire, a former White House National Security Council official under President Joe Biden and a senior fellow at the Council on Foreign Relations.
McGuire described the chips as “the only obstacle to China’s progress in AI.”
“I cannot understand how the departments of Commerce, State, Energy and Defense could certify that exporting these chips to China benefits the national security of the United States,” he declared.
Led by White House AI czar David Sacks, several members of the Trump administration now argue that shipping advanced AI chips to China deters Chinese competitors like Huawei from redoubling efforts to catch up with Nvidia and AMD’s more advanced chip designs.
Reuters reported last week that Nvidia was considering increasing production of the H200, the immediate predecessor to its flagship Blackwell chips, after initial orders from China exceeded current capacity.
While H200 chips are slower than Nvidia’s Blackwell chips in many AI tasks, they are still widely used in the industry and have never been allowed for sale in China.
Trump had previously opened the door to sales of a less advanced version of Nvidia’s Blackwell chips, its cutting-edge offering, but backed off the move and approved sales of the H200 instead.
With information from Reuters
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