According to the sources, the administration of U.S. President Donald Trump has initiated a review that could lead to the first shipments to China of Nvidia’s second-most potent AI chips, fulfilling his promise to permit the controversial sales.
Trump this month announced that he would permit sales of Nvidia’s H200 chips to China, with the U.S. government imposing a 25 percent fee, and that the sales would keep U.S. companies ahead of Chinese chipmakers by reducing demand for Chinese chips.
The decision attracted scorn among China hawks on both ends of the U.S. political spectrum over concerns the chips would propel Beijing’s military and undermine American dominance in artificial intelligence.
However, it has still been questioned how fast the U.S. would sanction such sales and whether Beijing would permit the Chinese companies to buy the Nvidia chips.
Reuters also suggested last week that Nvidia was looking at increasing production of the H200, the immediate predecessor of its flagship Blackwell chips, after early orders within China exceeded the existing capacity.
The sources said that license applications for shipments of chips were sent to the State, Energy, and Defense Departments by the U.S. Commerce Department, in charge of export policy, on the condition of anonymity since the procedure is not public.
In accordance with export regulations, those agencies have 30 days to provide their input, and it is up to Trump to make the final ruling in case of disagreements among agency officials. A previous report had not been made about the beginning of the inter-agency licensing review.
Therefore, the Commerce Department and Nvidia did not respond immediately to requests for comment. A spokesperson at the White House did not respond to the review, but added that “the Trump administration is committed to ensuring the dominance of the American tech stack – without compromising on national security.”
Although the H200 chips are slower than Nvidia Blackwell chips at most AI tasks, they are still widely used in the industry and have not been permitted to be sold in China.
Trump had already conceded to sales of a less-advanced edition of the Nvidia Blackwell chips, its most developed product, but reversed the decision and sanctioned the sale of the H200 instead.
Trump administration AI czar David Sacks is leading a group that is currently arguing that exporting advanced AI chips to China is an incentive to Chinese competitors like Huawei to not redouble their efforts to match the best designs made by Nvidia and AMD, which offer cutting-edge chip models.
The decision is a dramatic shift since Trump focused his attention on the global community in his first term when he shut the doors to Chinese access to American technologies, claiming that Beijing is stealing the intellectual property of American companies and uses commercially acquired technology to strengthen its military, which Beijing refutes.
