The Trump administration has initiated a formal review process for applications that could lead to the first-ever shipments of Nvidia's H200 artificial intelligence chips to China. This development represents a significant policy shift from the previous Biden administration's stance, which had blocked sales of advanced AI chips to China over national security concerns.
President Donald Trump announced earlier this month his intention to permit these sales, with Washington collecting a 25% fee on each transaction. The Commerce Department has forwarded license requests for the chip sales to three other agencies – State, Energy, and Defense – for their input. Under current rules, these agencies have 30 days to provide their assessments, though Trump will make the final decision regardless of their recommendations.
The proposal has sparked sharp bipartisan criticism from lawmakers and former officials who worry the powerful chips could boost Beijing's military capabilities and weaken America's lead in artificial intelligence development. An administration official emphasized the review would be comprehensive and "not some perfunctory box we are checking."
This marks a notable change from Trump's first presidency, when he took aggressive steps to limit Chinese access to American technology. White House AI czar David Sacks and other Trump administration members now contend that selling advanced chips to China actually discourages Chinese companies like Huawei from working harder to match cutting-edge designs from Nvidia and AMD.
Meanwhile, President Trump has signed into law sweeping investment restrictions targeting American money flowing into Chinese technology companies. The provisions, included in the annual National Defense Authorization Act, specifically target companies that strengthen Beijing's military and surveillance operations. The law makes permanent and expands a 2023 executive order from the Biden administration, giving the president authority to use International Emergency Economic Powers Act sanctions to prevent Americans from buying significant ownership stakes in certain Chinese companies.
A Chinese Embassy spokesperson in Washington criticized the legislation, saying it was "overstretching the concept of national security" and would "distort normal investment flows between the two countries."
