Nvidia chip sales to China sparks US security concerns
Hardliners and Democratic lawmakers in China have criticized the Trump administration for its decision to allow Nvidia to ship its second-most advanced artificial intelligence chip to China, expressing concern that Beijing could use the technology to strengthen its military.
President Donald Trump announced the move to allow H200 sales to China in a social media post on Monday, adding that the US would receive a 25 percent fee on such sales and that AMD and Intel would receive approval to sell similar chips there.
Former Undersecretary of the Army Brad Carson said the decision “puts our competitive advantage up for sale in exchange for a 25 percent cut on chip exports.”
“When China starts supplying its military with artificial intelligence based on US chips, the world will regret this decision.”
The move is the most dramatic example yet of Trump’s new attempt to loosen restrictions on the sale of advanced American artificial intelligence technology to China at a time when he seeks to expand overseas markets for US companies.
It also faces Beijing’s imposition of export controls on rare earth minerals, which are key components for the production of a wide range of technologies in the United States and abroad.
White House spokesman Kush Desai said the administration is committed to American AI dominance “without compromising national security.”
Liu Pengyu, spokesman for the Chinese embassy in Washington, said: “China hopes that the United States will take concrete steps to maintain the stability and proper functioning of global supply chains.”
Trump’s action on Monday marks a dramatic turnaround from his first term, when he harshly cracked down on China’s access to U.S. technology, citing allegations that Beijing was stealing American intellectual property and using commercially obtained technology to bolster its military.
But the administration, led by White House AI czar David Sacks, now argues that shipping advanced AI chips to China has deterred Chinese rivals such as Huawei from redoubling their efforts to catch up with the most advanced chip designs from Nvidia and AMD.
Sacks said in January that if AI chips made by sanctioned Chinese telecommunications equipment giant Huawei are everywhere within five years, “that means we lose… We can’t let that happen.”
Former Homeland Security and National Security Agency official Stewart Baker said the idea that the U.S. could keep China dependent on U.S. chips by allowing H200 is “an illusion.”
“There’s no world in which they won’t continue to push as hard as possible to have a domestic industry whose goal will ultimately be Nvidia’s bankruptcy and US dependence on Chinese AI,” Baker said.
Democratic Senator Ron Wyden accused Trump of being “once again taken to the cleaners by China” and argued that “every American will be less safe because of his terrible deal on artificial intelligence technology.”
U.S. Representative Raja Krishnamoorthi called the move “a profound national security mistake and a gift to our greatest strategic rival.”
But some China hawks see the impact as more limited, including Chinese military expert James Mulvenon, who wrote a report that helped convince the first Trump administration to impose sanctions on Chinese chip maker SMIC in 2020.
“Regardless of this decision, the Chinese government has made clear that dependence on Nvidia or any other Western technology is not their long-term strategic goal, so these gains are likely to be temporary,” he said.
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