In a significant policy shift, the United States has initiated a formal process that could lead to China receiving its first shipments of Nvidia's second-most powerful artificial intelligence chips. This move signals a potential relaxation of America's long-standing restrictions on advanced technology exports to Beijing.
Licensing Process Underway for Chip Exports
According to a Reuters report citing five informed sources, the US government has begun a mandatory inter-agency licensing review. The Commerce Department has forwarded applications related to the proposed export of Nvidia's H200 chips to the State, Energy, and Defense Departments for their assessment. Under US regulations, these departments have 30 days to submit their reviews, after which the final decision rests with the President.
This development follows a recent commitment from US President Donald Trump to permit such sales. Earlier this month, Trump stated his administration would allow Nvidia to sell its H200 chips to China, with the US collecting a 25% fee on the transactions. He argued that exporting American chips would help US companies maintain an edge over Chinese chipmakers by reducing demand for China's domestic alternatives.
Internal Debate and Strategic Concerns
However, the potential policy change has ignited fierce debate within the United States. It has drawn sharp criticism from China hawks across the political spectrum, who contend that providing such advanced technology could enhance Beijing's military capabilities and erode the US lead in artificial intelligence.
Former national security officials have voiced strong opposition. Chris McGuire, a former White House National Security Council official under President Joe Biden, called large chip outflows to China "a significant strategic mistake." He told Reuters that these chips are "the one thing holding China back in AI" and expressed bewilderment at how the relevant US departments could certify that such exports align with national security interests.
Conversely, officials within the Trump administration backing the policy, led by White House AI czar David Sacks, argue the exports could have the opposite effect. They believe that selling advanced chips to China would discourage domestic firms like Huawei from intensifying efforts to close the technological gap with leaders like Nvidia and AMD.
A Reversal from Previous Policies
This potential move represents a notable transition from the approach of the previous Biden administration, which imposed extensive restrictions on exports of advanced AI chips to China, citing national security risks. It also marks a shift from Trump's own aggressive first-term stance, when he moved to restrict China's access to US technology over allegations of intellectual property theft and military technology transfer, which Beijing denies.
While the White House declined to comment directly on the ongoing review, a spokesperson stated that "the Trump administration is committed to ensuring the dominance of the American tech stack – without compromising on national security." An administration official stressed the review's comprehensiveness, noting it was "not some perfunctory box we are checking."
Despite the announcement, uncertainty remains regarding the approval timeline and whether Chinese authorities will permit local firms to purchase the chips. Meanwhile, Reuters reported last week that Nvidia is considering increasing production of the H200 chips after initial orders from China exceeded existing manufacturing capacity. The H200, which sits just below Nvidia's flagship Blackwell processors, is widely used and has never before been approved for sale in China.
