Trump administration faces backlash over Nvidia H200 AI chip sales to China

Witnesses and lawmakers at a foreign affairs hearing blasted the Trump administration’s approval for the sale of Nvidia’s H200 AI chips to China and called for it to reverse the decision, as the White House’s top technology adviser defended the move in the administration’s first public testimony discussing the latest export control measures.

Allowing China to buy Nvidia’s second most powerful AI chip is a “wrong path” that would “supercharge” Beijing’s military modernisation and damage the US’ goal to win the AI competition, former Deputy US National Security Adviser Matt Pottinger said on Wednesday at a hearing convened by the House Committee on Foreign Affairs to discuss how the US can win the AI race against China.

The Trump administration on Tuesday released new rules that would allow US chip giants Nvidia and AMD to sell certain advanced AI chips to China under a series of conditions such as having them tested in a US lab and exporting no more than half of the total amount sold domestically.

Trump announced in December that he would allow Nvidia to export its H200 chips to China with the US government getting a 25 per cent cut of sales. On Wednesday, he signed a proclamation to impose a 25 per cent tariff on advanced chips like Nvidia’s H200. The move targets chips that pass through the US for re-export, allowing the government to take a significant cut of Nvidia’s China sales.