Trump Allows Nvidia to Sell H200 Chips to China in Major Policy Shift:

Trump announced the change on Monday, saying he had already informed Chinese President Xi Jinping. Under the new arrangement, China will be allowed to buy Nvidia’s H200 chip as long as customers are “approved” and certain national security conditions are met. In return, 25 percent of the revenue from these sales will go to the U.S. government. According to Trump, this updated policy will help protect American jobs, boost U.S. manufacturing, and deliver financial benefits to American taxpayers. He also said that AMD and Intel are expected to receive similar treatment as long as national security rules are followed. Nvidia welcomed the news, describing the policy as a “thoughtful balance” between national security and economic opportunity. The company added that allowing these exports would support high-paying jobs in the U.S., citing manufacturing and technology development. Following the announcement, Nvidia’s shares rose more than 2 percent in after-hours trading, showing strong investor confidence. Trump criticized the Biden administration’s stricter export controls, arguing that they forced American chip companies to pour billions of dollars into producing weaker chips that “nobody wanted.” These restricted chips were sold mainly to China but were far less advanced than the ones available to the rest of the world. The H200 chip, released in 2023, is not Nvidia’s most powerful chip—that title belongs to the newest Blackwell series—but it is still extremely advanced. According to the Institute for Progress, a U.S. think tank, the H200 is nearly six times more powerful than Nvidia’s older H20 chip, which was designed to comply with Biden-era restrictions. Trump said the Blackwell chips will remain fully restricted and will not be sold to China. Earlier in August, Nvidia and the Trump administration reached an agreement in which the company would pay the U.S. government 15 percent of all sales of the H20 chip. The newly announced 25 percent cut on H200 sales reflects the chip’s higher performance and greater strategic value. Tilly Zhang, a technology expert at Gavekal Dragonomics, said Trump’s decision shows a shift toward accepting “market realities.” She explained that completely blocking China’s technological progress has become unrealistic, and U.S. companies like Nvidia are heavily motivated to maintain their global market share. According to Zhang, the new direction suggests that the U.S. is moving from trying to restrict China’s tech growth toward competing more directly in the global market. She added that the AI race between the U.S. and China now appears to be shifting away from strict export controls and more toward innovation and commercial competition. This change, she said, could push chipmakers in both countries to innovate faster. However, Trump’s decision sparked immediate criticism from several Democratic lawmakers. Senator Elizabeth Warren accused him of “selling out U.S. security,” saying that Nvidia’s AI chips have been previously smuggled into China and described by U.S. officials as crucial for building advanced AI systems. Chris McGuire, a senior fellow at the Council on Foreign Relations and former White House tech policy adviser, argued that loosening export controls could help Chinese AI companies close the technological gap with the U.S. He warned that allowing China to purchase more capable chips would also enable Chinese cloud companies to build stronger data centers worldwide, potentially weakening the U.S. advantage in global AI infrastructure. Trump’s decision, therefore, represents both an economic opportunity and a strategic risk, raising new questions about how the United States should balance national security with the commercial interests of its leading technology companies.

TECHNOLOGY