The Trump administration has reportedly started examining applications that could lead to the first-ever shipments of Nvidia’s H200 artificial intelligence chips to China. This development comes as President Donald Trump also signed new legislation giving the government broader authority to block American money from flowing into Chinese technology companies.
Trump announced earlier this month that he planned to permit sales of Nvidia’s H200 processors to China, with Washington collecting a 25% fee on each transaction. The president argued these sales would benefit American companies by reducing Chinese demand for domestically-produced chips, helping U.S. firms maintain their competitive edge.
The proposal has sparked sharp criticism from lawmakers and former officials across party lines who worry the powerful chips could boost Beijing’s military capabilities and weaken America’s lead in artificial intelligence development.
Four agencies review export applications
The Commerce Department, which handles export decisions, has forwarded license requests for the chip sales to three other agencies – State, Energy, and Defense – for their input, the sources told Reuters. They spoke anonymously because the review process is not public information.
Under current rules, these agencies have 30 days to provide their assessments. An administration official told the review would be comprehensive and “not some perfunctory box we are checking.” However, Trump will make the final call regardless of what the other departments recommend.
A White House representative would not discuss the ongoing process but stated “the Trump administration is committed to ensuring the dominance of the American tech stack, without compromising on national security.”
The Biden administration had previously blocked sales of advanced AI chips to China and other nations that might serve as pathways for smuggling the technology to Beijing. Officials cited national security risks as the reason for these restrictions.
Trump’s current stance marks a sharp change from his approach during his first presidency, when he took aggressive steps to limit Chinese access to American technology. At that time, he pointed to allegations that Beijing steals U.S. intellectual property and uses commercially-purchased technology for military purposes, claims China denies.
White House AI czar David Sacks and other Trump administration members now contend that selling advanced chips to China actually discourages Chinese companies like Huawei from working harder to match the cutting-edge designs from Nvidia and AMD.
As reported by Cryptopolitan previously, Nvidia was looking at ramping up H200 production after early orders from China exceeded available supply. While H200 chips perform slower than Nvidia’s current Blackwell processors for many AI applications, they remain widely used and have never been approved for Chinese buyers.
Trump initially considered allowing sales of a less-powerful version of Blackwell chips but changed course and settled on the H200 instead.
Congress passes sweeping investment restrictions
On the investment front, President Trump has now signed into law the most sweeping measures yet for monitoring and restricting where American dollars go in Chinese technology businesses. The provisions specifically target companies that strengthen Beijing’s military and surveillance operations.
The restrictions are included in the annual National Defense Authorization Act, which identifies entities in China and other problematic countries, Cuba, North Korea, Venezuela and Russia, working on technologies with both commercial and military uses.
“Investments propping up Communist China’s aggression must come to an end,” House Speaker Mike Johnson said earlier this month.
The House approved the NDAA last week and the Senate passed it Wednesday, both with large bipartisan support.
The law makes permanent and expands a 2023 executive order from the Biden administration. Congress is now writing into law the authority to watch, and sometimes stop, U.S. financing of Chinese work on emerging technologies including artificial intelligence, quantum computing and advanced semiconductors.
The law lets the president use International Emergency Economic Powers Act sanctions to prevent Americans from buying significant ownership stakes or debt in certain Chinese companies.
The targeted entities include those based in China, Hong Kong and Macau, state-owned businesses, and companies connected to Chinese Communist Party officials.
Even transactions that don’t get blocked will require mandatory reporting, forcing U.S. companies to notify the government about deals involving sensitive Chinese technologies.
A Chinese Embassy spokesperson in Washington criticized the legislation, saying it was “overstretching the concept of national security” and would “distort normal investment flows between the two countries.”
Senator John Cornyn of Texas, who championed the legislation over five years, stated: “Every dollar invested in China by a United States investor into a Chinese company is a dollar that’s going toward the potential production of weapons and technology that one day may be used to kill Americans.”
Senator Catherine Cortez Masto of Nevada said America’s national security future depends on “making sure we remain ahead of our adversaries in the race to develop cutting-edge technologies like AI and semiconductors.”
Get $50 free to trade crypto when you sign up to Bybit now
Source: https://www.cryptopolitan.com/trump-reverses-course-on-china-tech-policy/
