Trump Administration Approves Sale of Lower-Tier Nvidia AI Chips to China

The Trump administration has indicated it is comfortable with Nvidia selling AI chips to China, provided they are not the company’s top-tier products. Commerce Secretary Howard Lutnick stated on CNBC that the US will retain its best chips domestically, with China receiving what he described as Nvidia’s “fourth best” offering. This decision follows Nvidia’s announcement that it has received clearance to resume selling its H20 chip in China, a move that has further boosted the company’s already soaring stock value.

Nvidia’s H20 chip was specifically designed to be less powerful than its other offerings, ensuring that the technology sold to China does not pose a significant threat to US technological supremacy. Lutnick emphasized that the administration’s strategy is to maintain a technological edge over China, ensuring that Chinese developers remain dependent on American technology. This approach is seen as a way to keep China buying US chips while preventing the transfer of the most advanced technology.

The decision to allow Nvidia to sell to China comes after CEO Jensen Huang met with President Donald Trump, during which Huang advocated for the sale of Nvidia’s chips to China. Prior to this announcement, Nvidia had reported an $8 billion loss from unshipped orders, highlighting the financial stakes involved in the decision.

Lutnick also noted that the administration believes China is capable of developing its own chips, but the goal is to ensure that US chips remain superior enough to maintain market dominance. By selling enough chips to China, the US aims to create a dependency on American technology, ensuring continued demand for US products in the global market.