US President Donald Trump has announced that he will allow AI chip giant Nvidia to sell its cutting-edge H200 chips to “approved customers” in China.
“We will protect national security, create American jobs, and maintain America's leadership in artificial intelligence,” Trump said on social media Monday.
The decision will apply to other US chip companies such as AMD and comes after intense lobbying by Nvidia chief Jensen Huang, who visited Washington last week to drum up support.
Nvidia – the world's leading chip firm and most valuable company – has found itself at the center of a geopolitical tug-of-war between the US and China in recent months and has been banned from selling its most advanced chips to Beijing.
Trump lifted the ban on chip sales in July but required Nvidia to pay 15% of its revenue in China to the US government.
Beijing then reportedly ordered its technology companies to stop buying Nvidia chips produced for use in the Chinese market.
“We applaud President Trump's decision to allow the American chip industry to compete to support good-paying jobs and manufacturing in America,” Nvidia said in a statement provided to BBC News.
Nvidia H200 is a generation of Blackwell chips, which is considered the world's most advanced semiconductor artificial intelligence processor.
Mr Huang told the BBC said in September that the US needs to “make sure that people can access this technology from around the world, including China.”
He has also repeatedly warned that China, which has built its own chip-making ecosystem, is lagging behind the US in chip development.
Nvidia welcomed Trump's announcement on Monday.
“Offering the H200 to approved commercial customers verified by the Commerce Department strikes a thoughtful balance that is very good for America,” Nvidia said in a statement.
The company's shares rose slightly on this news.
Trump said: “25% [sic] will be paid to the United States of America” in his post.
The BBC has asked the White House for clarification on the arrangement, which is likely to face opposition from national security hawks in Congress.
Selling H200 chips to some Chinese customers “buys time” for the US to negotiate a rare earths deal with Beijing and prevent major disruptions to global supply chains, said Alex Capri of the National University of Singapore.
China has a near-monopoly on processing rare earth minerals, which are needed to make most electronics.
While access to H200 chips is likely to benefit China's technology sector, Beijing is still expected to work to reduce dependence on the US, Mr Capri said.
Beijing has previously advised local technology companies to phase out older Nvidia H20 chips and encouraged them to buy domestically produced semiconductors, it noted.
Researchers at Georgetown University's Center for Security and Emerging Technologies (CSET) said China's People's Liberation Army is using advanced chips developed by US companies to develop artificial intelligence-enabled military capabilities.
“By making it easier for the Chinese to access these high-quality AI chips, you will allow China to more easily use and deploy AI systems for military applications,” said Cole McFaul, senior analyst at CSET. “They want to use advanced chips to gain an advantage on the battlefield.”
