Trump changes direction on Nvidia exports to China

Opponents condemn policy change as ‘a colossal economic and national security failure’

In another about-turn, Trump has approved Nvidia H200 chip sales to China. It will make the chipmaker billions of dollars, but Democrats say it risks eroding America’s edge in the AI race and strengthening Beijing’s military and cyber capabilities.

In another policy reversal, President Donald Trump announced yesterday that US will allow Nvidia to export its powerful H200 AI chips to “approved customers” in China. The US will collect a 25% cut of sales revenue.

Speaking via a post on his social media platform, Trump said he had informed Chinese President Xi Jinping about the decision and that Xi “responded positively.” Trump framed the move as part of a broader strategy to support American jobs, strengthen US manufacturing, and benefit taxpayers.

The announcement marks a significant about-turn from both the Trump administration and Biden era policy. Since 2022, the US has blocked exports of cutting-edge AI chips to China citing national security concerns, and a desire to ensure that the US stays at the leading edge of AI innovation.

The H200 is Nvidia’s second-most powerful chip. It is substantially more capable than the H20 chip previously manufactured for China, which the Chinese administration blocked as part of trade talks earlier this year – also due to security concerns.

Under the new policy, the more advanced Blackwell and the upcoming Rubin families of chips remain off limits to Chinese customers.

Trump had signalled in November that there might be some flexibility in policy on second-tier chips, but it is noticeable that this announcement follows a meeting between him and Nvidia’s Jensen Huang last week, where the pair discussed H200 exports, people familiar with the matter said.

It’s certainly a win for Nvidia which has seen its market share in China eroded. Resuming shipments of the H200 will restore a lucrative revenue stream, and shares in Nvidia were boosted as a result of the decision.

“We applaud President Trump’s decision,” said a Nvidia spokesperson. He added that offering the H200 chips “to approved commercial customers, vetted by the Department of Commerce, strikes a thoughtful balance that is great for America”.

The easing of restrictions will also apply to AMD and Intel.

Democrat opposition

However, not everyone is convinced the decision is great for America. Several senior Democrat senators including those serving on the foreign relations committee, condemned the move as “a colossal economic and national security failure,” warning that the H200 could become embedded in China’s military or surveillance systems. They, and other Democratic senators, urged Trump to reverse the decision saying:

“The H200s are vastly more capable than anything China can make and gifting them to Beijing would squander America’s primary advantage in the AI race.

“Access to these chips would give China’s military transformational technology to make its weapons more lethal, carry out more effective cyberattacks against American businesses and critical infrastructure, and strengthen their economic and manufacturing sector. Chinese AI giant DeepSeek said as recently as last week that the lack of access to advanced American-designed AI chips is the single biggest impediment to its ability to compete with U.S. AI companies. With this decision, President Trump is poised to remove that barrier.”

Computing says:

This latest decision from Trump looks like he’s been persuaded by Jensen Huang that the US can balance its national security interests with shorter-term commercial imperative.

The devil will certainly be in the detail of where the 25% cut of profits ends up.

But Trump may be simply being pragmatic because anyone paying attention this year will have noticed that export bans are not slowing the pace of AI innovation in China. Chinese AI models have improved at a stunning pace this year, with recent reports suggesting that increasing numbers of US start-ups are building on open-source Chinese models.

By cutting off access to the best US manufactured chips, Chinese developers have been forced to innovate. Chinese models often operate at a fraction of the price of Western models, and open sourcing allows start-ups to customise them more easily. The Silicon Valley proprietary equivalents are expensive and inflexible by comparison.