President Trump said Monday that his administration had authorized Nvidia to begin selling its second-largest chip to China, a big step up from what the artificial intelligence chipmaker had been allowed to offer Beijing.
The administration had spent months grappling with whether it was comfortable relaxing its policy on the sale of a critical AI technology that has the potential to help China militarily and economically.
In a post on social media, Mr. Trump said the Commerce Department was finalizing the details and would make similar options available to other chipmakers such as Advanced Micro Devices and Intel. The president said part of the chip revenue would go to the US government, a proposal experts say could run afoul of US law.
The decision is a big win for Jensen Huang. Nvidia’s CEO, who spent months lobbying the White House to ease its export restrictions.
The move is also a departure for Mr. Trump, whose administration initially promised to limit the sale of AI chips to China. That early position had support in much of Washington, and a looser policy that has become evident in recent months has drawn bipartisan complaints from Congress.
Last week, six senators, including Pete Ricketts, a Republican from Nebraska, and Chris Coons, a Democrat from Delaware, introduced a bill that would limit the sale of AI chips to China.
The change of administration followed a campaign by Mr. Huang and David Sacks, its AI and crypto czar, who have pushed back on national security concerns regarding AI chips. They have argued that increasing Nvidia’s sales to China would make Chinese companies dependent on its technology and give it more money to develop future generations of chips.
Mr. Huang met with Mr. Trump in the White House last week, and Mr. Trump subsequently praised the director, saying, “He’s done a great job.”
John Rizzo, a spokesman for Nvidia, said that offering H200 chips to approved commercial customers that had been vetted by the Commerce Department would create “a thoughtful balance that’s great for America.”
“We applaud President Trump’s decision to allow America’s chip industry to compete to support high-wage jobs and manufacturing in America,” he added.
The approval of the chip sale was reported earlier by Semafor.
Now the question is: Will China buy Nvidia’s latest offering? The administration wants to encourage Chinese companies to use Nvidia’s H200 chip, which it released last year, while restricting sales of the company’s latest generation of chips, known as Blackwell.
In July, the Trump administration dropped its restrictions on the sale of a chip called the H20 that Nvidia developed specifically for China. But Beijing discouraged companies from buying the chip, and administrators warned it could have “backdoor security risks.”
Nvidia may run into similar challenges when it starts selling the more powerful H200. After the first Trump administration and the Biden administration began restricting US technology sales to China, Beijing increased its spending to become technologically self-reliant. Huawei, the country’s tech giant, has improved its own AI chips.
This summer, Mr. Trump the idea that the government should cut the sale of AI chips to China. On Monday, he repeated that he wrote that “25% will be paid to the US” – a 10 percentage point increase over what the company has previously agreed to pay the US government.
Government lawyers have been studying how to enact such a policy, since US law prohibits charging fees for export licenses. Mr. Huang said at a news conference in Washington in October that officials were working on a new policy to collect the fees.
Neither US nor Chinese officials have publicly acknowledged that the H200 chip was under discussion. But US regulations surrounding the sale of technology to China have been a central issue in the countries’ relations.
After Mr. Trump imposed double-digit tariffs on Chinese exports in April, Beijing restricted exports of rare earth minerals important to a number of industries. The countries tentatively agreed to go back on those restrictions in the spring, but the truce fell apart after the United States announced new restrictions on Chinese technology companies. Chinese officials argued that these measures were against the spirit of their agreement.
At a meeting in South Korea in October, Mr. Trump and Xi Jinping, the leader of China, the truce, in which the United States promised to keep tariffs low and Beijing to provide stable exports of rare earths and resume its purchases of American soybeans. The agreement was also widely seen to include a de facto US freeze on any new technology restrictions.
Since then, the countries have worked to keep the peace, and in a call with Mr. Xi in late November, Mr. Trump accepted an invitation to visit China in April. On Friday, Scott Bessent, the Treasury secretary, and Jamieson Greer, the US trade representative, spoke with China’s vice premier about the steps the parties were taking to uphold the agreement.
But others in Washington have been critical of the administration’s warmer stance toward China. In a letter last week, Sen. Elizabeth Warren, Democrat of Massachusetts, expressed concern about the potential sale of the H200 chip.
“I urge you to stop ignoring the input of bipartisan members of Congress and your own experts to cut deals that compromise America’s national security,” she wrote.
