U.S. President Donald Trump's administration has launched a review process that could lead to the first shipment of Nvidia's second-most powerful artificial intelligence chip to China, five people familiar with the matter said, fulfilling Trump's previous promise to approve the controversial chip sale.
Trump said this month that he would allow sales of Nvidia's H200 chips to China, with the U.S. government charging a 25% fee on such transactions. He claimed that this sales initiative will reduce market demand for Chinese local chips, thereby helping U.S. companies maintain their lead over Chinese chip manufacturers.
The decision drew fierce criticism from China hardliners across the U.S. political spectrum, who worried that such chips would significantly enhance China's military capabilities and thereby weaken the U.S.'s dominant position in the field of artificial intelligence.
But questions remain: How quickly will the U.S. government approve such sales? Will China allow its own companies to purchase these NVIDIA chips?
People familiar with the matter anonymously revealed that the U.S. Department of Commerce, which is responsible for supervising export policy, has sent the sales license application for these chips to the U.S. Departments of State, Energy and Defense for review. The people spoke on condition of anonymity because the review process has not been made public.
According to export-related regulations, the above-mentioned departments need to provide review opinions within 30 days.
One of the people familiar with the matter is a government official, who emphasized that the review will adhere to the principle of comprehensiveness and rigor and "will not be a formality."
However, according to relevant regulations, the final decision-making power still rests with Trump.
The launch of this inter-agency licensing review has not been reported by the media before. The U.S. Department of Commerce and Nvidia did not respond to requests for comment on this matter.
A White House spokesman did not comment on the review, but said "the Trump administration is committed to ensuring the dominance of the U.S. technology system without compromising national security."
Nvidia shares rose 1.4% in premarket trading Friday.
The Biden administration had banned the sale of advanced artificial intelligence chips to China
Previously, the Biden administration introduced a series of restrictive measures on the grounds of national security, prohibiting the export of advanced artificial intelligence chips to China and some countries that may become channels for chip smuggling.
Trump's move not only deviates from the relevant policies of the Biden administration, but also constitutes a huge reversal from the stance of his first presidential term. During his first term, Trump attracted international attention by cracking down on China’s access to U.S. technology. At that time, he claimed that China had stolen U.S. intellectual property and used commercial technology to strengthen its military power. China denied this.
Chris McGuire, a former U.S. President’s National Security Council official and senior fellow at the Council on Foreign Relations, said that exporting large quantities of such chips to China “is a major strategic mistake.”
McGuire said that this type of chip "is a key bottleneck restricting the development of artificial intelligence in China."
He also said: "I really can't imagine how the U.S. Departments of Commerce, State, Energy and Defense can issue certifications to confirm that exporting such chips to China is in the national security interest of the United States."
Led by White House artificial intelligence chief David Sachs, some Trump administration officials currently argue that exporting advanced artificial intelligence chips to China can dissuade Chinese competitors such as Huawei from increasing investment in research and development and catching up with the cutting-edge chip design levels of Nvidia and Advanced Micro Devices.
Reuters reported last week that Nvidia was considering expanding production capacity for its H200 chips as initial orders from the Chinese market exceed current production capacity. This chip is the previous generation of Nvidia's current flagship "Blackwell (Blackwell)" chip.
Although the H200 chip is not as fast as Nvidia's Blackwell chip in many artificial intelligence tasks, it is still widely used in the industry and has never been approved for sale in China.
The Trump administration had previously planned to approve the sale of low-end versions of Nvidia's cutting-edge Blackwell chips to China, but later shelved the plan and instead approved the sale of H200 chips to China.