Trump Administration Eases Restrictions on AI Chips to China

President Trump announced that he is allowing Nvidia to sell advanced H200 computer chips to approved customers in China, marking a significant shift in U.S. export policy regarding AI technology. According to CBS News, Trump stated that the U.S. government will take a 25% cut from these chip sales, a higher cut than previously negotiated.

He mentioned that he informed Chinese President Xi Jinping about this decision, who responded positively. The Department of Commerce is finalizing the details, and similar offers will be made to other chipmakers like AMD and Intel.

Nvidia's H200 chips are categorized as powerful AI chips, far exceeding the capabilities of their H20 model, which had previously faced restrictions due to national security concerns. A Nvidia spokesperson expressed support for the decision, suggesting it strikes a balance beneficial for America.

However, bipartisan concerns have been raised about the implications of these sales, with some lawmakers warning that it could bolster China's military and surveillance capabilities. Democratic Senators Elizabeth Warren and Andy Kim have questioned the legality of the arrangements, advocating for congressional hearings on the matter.

The Biden administration had imposed strict export controls on advanced chips, aiming to maintain U.S. competitiveness and protect national security interests, which Trump criticized in his announcement, claiming that such restrictions were counterproductive.

This policy change could potentially lead to a significant financial windfall for Nvidia, valued at approximately $4.5 trillion, as they regain access to the Chinese market, which they previously dominated before U.S. restrictions were enacted.