Donald Trump has suggested he might allow Nvidia to sell chips in China that are more technology advanced than currently permitted, despite deep-seated fears in Washington that Beijing could harness US artificial intelligence capabilities to supercharge its military.
In a briefing on Monday, the president suggested he could “make a deal” for Nvidia to sell a downgraded version of its flagship Blackwell chip in China. The move could open the door to China securing more advanced computing power from the US, even as the two countries battle for technology supremacy, critics said.
“Jensen [Huang, Nvidia CEO] also has the new chip, the Blackwell. A somewhat enhanced-in-a-negative-way Blackwell. In other words, take 30% to 50% off of it,” Trump told reporters in an apparent reference to slashing the chip’s computing power.
“I think he’s coming to see me again about that, but that will be an un-enhanced version of the big one,” he added.
The move sparked unease across Washington, where China hawks of both parties have long sought to keep Beijing generations behind US AI technology. Nvidia’s chips are a major driver of the AI boom, highly sought-after by both China and the US.
“I am concerned by reports that the US government will be taking a cut of the proceeds from the sale of advanced H20 and equivalent chips to China,” John Moolenaar, the Republican head of the House China committee, told the Financial Times.
“Even with scaled-down versions of flagship Nvidia [chips], China could spend and buy enough of them to build world-leading, frontier-scale AI supercomputers,” said Saif Khan, former director of technology and national security at the White House national security council under Joe Biden, who heavily restricted US AI chip exports abroad. “This could directly lead to China leapfrogging America in AI capabilities.“
It comes after the Trump administration confirmed an unprecedented deal with Nvidia – and fellow chipmaker AMD – to give the US government 15% of revenue from sales of some advanced chips in China. The arrangement covers revenue from Chinese sales of Nvidia’s H20 chips, and AMD’s MI308 chips.
The H20 and MI308 chips were banned from sale to China in April, despite the lower-powered H20 being designed specifically to abide by restrictions introduced by the Biden administration. However Nvidia said last month it had won clearance to resume shipments and hoped to start deliveries soon.
Trump on Monday defended the agreement: “I said, ‘Listen, I want 20% if I’m going to approve this for you, for the country’”, in an apparent reference to the percentage he initially sought before negotiations with Nvidia.
The deal is extremely rare for the US and marks Trump’s latest intervention in corporate decision-making, after pressuring executives to invest in American manufacturing and demanding the resignation of Intel’s new CEO, Lip-Bu Tan, over his ties to Chinese companies.
The US government has for several years sought to limit supplies of technology to China that could be used in ways that threaten US national security, especially chips that can power artificial intelligence development and weapons.
China’s foreign ministry said on Monday that the country had repeatedly stated its position on US chip exports. The ministry has previously accused Washington of using technology and trade measures to “maliciously contain and suppress China”.
With Reuters