U.S. Administration Reviews Potential Shipment of Nvidia AI Chips to China
WASHINGTON, Dec 18 (Reuters) – The administration of President Donald Trump has initiated an evaluation that could lead to the inaugural shipments of Nvidia’s second-most potent AI chips to China, as reported by five sources. This step aligns with his commitment to permit these contentious sales.
Earlier this month, Trump indicated his intent to authorize the sale of Nvidia’s H200 chips to China. The U.S. government is set to levy a 25% fee on these transactions, aiming to maintain the competitive edge of American firms over their Chinese counterparts by diminishing demand for Chinese-made chips.
This development has elicited significant criticism from China hawks across the U.S. political landscape, who express apprehensions that these chips might enhance Beijing’s military capabilities and weaken the United States’ standing in the realm of artificial intelligence.
Nonetheless, uncertainties linger regarding the speed with which the U.S. may sanction these sales and whether Chinese firms will be permitted to procure the Nvidia chips.
The U.S. Commerce Department, responsible for export policies, has transmitted license applications for these chip sales to the State, Energy, and Defense Departments for their evaluation. This information emerges from sources who requested anonymity due to the non-public nature of the process.
According to export regulations, these agencies have a period of 30 days to provide their insights.
One source, an official from the administration, underscored that this review would be comprehensive, asserting it is “not a mere pro forma exercise.” However, it must be noted that the ultimate decision rests with Trump.
The initiation of this inter-agency licensing review has not been previously reported. Neither the Commerce Department nor Nvidia has responded promptly to requests for comments.
A spokesperson from the White House refrained from discussing the review but stated that “the Trump administration is devoted to preserving the supremacy of the American tech stack—without compromising national security.”
Biden Administration’s Ban On Advanced AI Chip Sales To China
The Biden administration had enacted a series of restrictions on the sale of advanced AI chips to China and other nations viewed as potential conduits for contraband to the adversarial nation, citing overarching national security concerns.
Trump’s recent pivot marks a departure from this approach and constitutes a stark reversal from his first term, during which he garnered global attention by intensifying restrictions on Chinese access to U.S. technology.
At that time, he cited allegations of intellectual property theft and the appropriation of commercially available technology to fortify military capabilities—claims that Beijing has consistently refuted.
Exporting substantial quantities of these chips to China would represent “a notable strategic blunder,” opined Chris McGuire, a former National Security Council official under President Joe Biden and a senior fellow at the Council on Foreign Relations.
McGuire characterized the chips as “the singular factor limiting China’s advancements in AI.” He remarked, “I struggle to comprehend how the departments of Commerce, State, Energy, and Defense could validate that exporting these chips to China serves U.S. national security interests.”
Under the leadership of White House AI czar David Sacks, several officials from the Trump administration now contend that shipping advanced AI chips to China may deter Chinese competitors, such as Huawei, from intensifying their efforts to bridge the gap with Nvidia’s and AMD’s most cutting-edge chip technologies.
Recent reports from Reuters indicated that Nvidia is contemplating increasing production of the H200, the immediate predecessor to its current flagship Blackwell chips, following an influx of orders from China that exceeds its current production capacity.
While the H200 chips exhibit slower performance compared to Nvidia’s Blackwell models across several AI applications, they remain widely utilized within the industry and have never been authorized for sale in China.
Trump had previously signaled readiness to approve sales of a less advanced version of Nvidia’s Blackwell chips. However, he eventually retracted that move and opted for sales of the H200 instead.
Source link: Marketscreener.com.
