Trump Administration's Controversial AI Chip Deal with China

The Trump administration has approved sales of Nvidia's AI chips to China, with conditions aimed at maintaining U.S. security. Despite pushback from China hawks, the decision requires certification and security measures from both Nvidia and Chinese buyers. This move follows efforts to deter Chinese advancements in AI.

The Trump administration granted approval on Tuesday for the sale of Nvidia's H200 AI chips to China, sparking debate among China hawks in Washington. The approval mandates a third-party review of the chips' AI capabilities and restricts China from acquiring more than 50% of what is sold to U.S. customers.

Nvidia must ensure adequate supply in the U.S., while Chinese buyers must prove their security measures and limit usage to non-military purposes. The announcement, made by President Trump last month, includes a 25% fee for the U.S. government and has faced backlash over fears it may bolster Beijing's military capacity.

Despite the Biden administration's prior ban on such sales, Trump's AI advisor, David Sacks, supports the exports to prevent rivals like Huawei from overtaking the U.S. in chip technology. Questions linger on whether adequate limits will be enforced, and a U.S. review is ongoing to assess the first shipments to China.

(With inputs from agencies.)