US Allows Nvidia to Resume Sales of AI Chips to China Amid Controversy
The US government, which halted sales of Nvidia’s H20 AI chips to China in April under the Trump administration, has recently allowed the company to resume shipments. A US official confirmed on Friday that the Commerce Department has begun issuing licenses for the sale of these chips to China.
When asked about reports that Nvidia agreed to pay 15% of its revenues from these sales to the US government, a Nvidia spokesperson said, “We follow rules the US government sets for our participation in worldwide markets.” The spokesperson added, “While we haven’t shipped H20 chips to China for months, we hope export control rules will let America compete in China and worldwide.”
AMD, another major chipmaker, did not comment on the news. The US Department of Commerce and China’s foreign ministry also did not immediately respond to requests for comment.
China remains an important market for both companies. Nvidia reported $17 billion in revenue from China in the fiscal year ending January 2025, making up 13% of its total sales. AMD earned $6.2 billion from China in 2024, which accounts for 24% of its revenue.
According to the Financial Times, Nvidia and AMD agreed to this arrangement—reportedly including payments on sales—as a condition for receiving export licenses for their advanced semiconductors, including AMD’s MI308 chips. However, it remains unclear how the US government plans to use the money collected from these sales.
Experts are divided on the decision. Geoff Gertz, a senior fellow at the Center for New American Security in Washington, called the situation “wild,” questioning whether selling these chips to China truly poses a national security risk. “Either it is a risk and we shouldn’t be doing it, or it isn’t, and then why add penalties?” he said.
US Commerce Secretary Howard Lutnick described the H20 chip as Nvidia’s “fourth-best chip” during a recent interview and explained that resuming sales is part of broader US-China negotiations over rare earth materials. Lutnick also stressed the importance of keeping Chinese companies using American technology, even if the most advanced products remain off-limits.
A US official added that the Trump administration does not believe the sale of H20 and similar chips compromises national security. The official was unsure about the exact timing or details of the agreement, but assured it complies with US law.
However, some critics voiced concerns. Alasdair Phillips-Robins, a former Commerce Department adviser during the Biden administration, said if the reports are true, “it suggests the administration is trading away national security protections for revenue.”
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