Trump weighs scaled-down Nvidia chip sales to China
Critics worry that even the scaled-down chips could still bolster China’s AI supercomputing power. Meanwhile, the US Commerce Department has approved the sale of Nvidia’s obsolete H20 chips to China, maintaining they do not threaten national security.
President Donald Trump has signalled that he may permit Nvidia to sell a toned-down version of its latest Blackwell AI chip to China, which could substantially shift US tech export policy.
The idea, still under discussion with Nvidia CEO Jensen Huang, would involve reducing the chip’s computing power by 30% to 50%, creating what Trump described as an ‘unenhanced’ model for the Chinese market. While framed as a compromise, critics warn that even these stripped-down chips could fuel Beijing’s AI ambitions.
The announcement follows an unprecedented agreement between the Trump administration, Nvidia, and AMD, under which the US government would collect 15% of revenue from certain AI chip sales to China.
Washington insiders have expressed unease, noting that, with enough scaled-down hardware, China could still build AI supercomputers capable of competing with or surpassing American capabilities.
Saif Khan, a former White House technology adviser, cautioned that the move could accelerate China’s path toward AI dominance, undoing years of strict export controls.
Currently, Nvidia’s most advanced chip approved for sale in China is the H20, built on older Hopper architecture. The H20 was specifically designed to comply with restrictions imposed under President Biden and entered the Chinese market in 2024.
Although shipments were halted earlier this year, the Trump administration recently granted clearance for exports to resume. Trump dismissed the H20 as ‘obsolete’ and claimed China had already mastered it, suggesting the new Blackwell variant would offer a fresh revenue stream while staying within national security boundaries.
Nvidia’s flagship US Blackwell chip, unveiled in March 2024, is up to 30 times faster than its predecessor, making it a significant leap in AI performance. Details about the proposed Chinese variant remain undisclosed, but Reuters previously reported it would come at a lower cost and reduced power.
The US Commerce Department has begun issuing licenses for the H20, with officials insisting these exports do not threaten national security.
For Nvidia and AMD, the deal represents a rare case of direct government revenue-sharing tied to foreign sales, reflecting Trump’s hands-on approach to corporate negotiations. His administration has previously pressured tech executives to prioritise domestic manufacturing and has intervened in leadership appointments.
Nvidia, for its part, has stated it will follow all US export rules, while AMD confirmed receiving approval to ship some AI processors to China without directly addressing the revenue-sharing clause.
Beijing’s reaction so far has been muted. China’s foreign ministry declined to comment on the potential Blackwell deal but has repeatedly accused Washington of using technology controls to ‘maliciously contain and suppress’ Chinese industry.
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