Donald Trump said he may allow Nvidia to sell a more advanced artificial intelligence chip in China, after confirming he had “negotiated a little deal” to give the US a share of the chipmaker’s revenues from the country.
The unprecedented deal the president struck with Nvidia’s chief executive Jensen Huang, revealed by the FT, involves the US taking 15 per cent of Chinese sales of its H20 chip, which it introduced in 2023 to comply with Biden-era export controls.
The performance of the H20 chips sold to China is restricted, compared with those available to US customers. Trump on Monday said that he planned to discuss a new deal with Huang to allow Nvidia to sell chips to China based on its latest, and most advanced, Blackwell platform.
Approval would unlock billions of dollars in sales for Nvidia after lobbying by Huang for access to the Chinese market, despite security concerns in Washington.
The president said the Blackwell chips would be “enhanced in a negative way” for sale in China, comparing the potential sales to the way the US sells downgraded versions of its most advanced fighter jets.
“It’s possible I’d make a deal,” said Trump, who described the H20 as “an old chip that China already has”.
“On the Blackwell, I think he [Huang] is coming to see me again about that,” he added.
The deal with Nvidia and AMD to pay a share of their Chinese revenues to the US government triggered shockwaves from Washington to Beijing as Trump upended long-standing corporate norms.
“I am concerned by reports that the US government will be taking a cut of the proceeds from the sale of advanced H20 and equivalent chips to China . . . there are questions about the legal basis for doing so,” John Moolenaar, the Republican head of the House China committee, told the FT.
“Export controls are a frontline defence in protecting our national security, and we should not set a precedent that incentivises the government to grant licenses to sell China technology that will enhance its AI capabilities.”
People familiar with the situation said some security officials were considering resigning over the signals that the president has sent.
“This isn’t why export control officials get up and go to work everyday, to put national security up for sale,” said one person. “This arrangement inflicts lasting damage on our export control apparatus — which was already struggling.”
Trump’s comments about Blackwell suggest that he is abandoning the controls that the Biden administration imposed to make it harder for China to access advanced chips that can be used for everything from modelling nuclear weapons to developing hypersonic weapons.
There is currently no version of Nvidia’s Blackwell chip legally available in China under US export controls. Nvidia declined to comment on Trump’s remarks about Blackwell.
“We may look back on this as the moment America voluntarily chose to subsidise our own strategic decline — handing Beijing the very AI chips that gave us our edge in the most consequential technology race of our time,” said Liza Tobin, a China expert at the Jamestown Foundation who served on the National Security Council in the first Trump administration.
Trump’s remarks come as US and Chinese officials continue trade negotiations that the president hopes will lead to a summit with his Chinese counterpart Xi Jinping.
The FT reported last month that the commerce department has been told to freeze new export controls on China to avoid jeopardising the chances of his summit with Xi.
The highly unusual deal Trump struck with AMD and Nvidia sparked surprise among experts and outrage among political opponents.
“The arrangement is shocking,” Michael Sobolik, a China expert at the Hudson Institute. “Pay-offs aren’t supposed to be a precondition for foreign commerce.”
Trump’s political opponents blasted the move for undermining US security, with one top Democrat calling it a “dangerous misuse of export controls”.
“This arrangement raises critical questions the administration must answer immediately, including what legal authority it has for extracting revenue-sharing as a condition for export licences,” said Raja Krishnamoorthi, the top Democrat on the House China committee.
The move has prompted questions over its legality.
Aaron Bartnick, a former White House national security and technology official, said the deal was “wild” and that it was unclear if it was legal given that the constitution’s export clause bans taxes or duties on exports.
“This is essentially just a kickback to the federal government for allowing Nvidia and AMD to undermine US national security,” said Bartnick, now at Columbia University’s Center on Global Energy Policy.
Nvidia and AMD did not respond to questions about whether they had conducted analysis to determine whether it posed any legal problems.
Nvidia’s H100 chip became Silicon Valley’s most sought-after commodity after the breakout success of OpenAI’s ChatGPT in 2022, as it became the default option for Big Tech companies and start-ups to train new AI models.
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Chips based on its successor, Blackwell, started shipping late last year but were deemed by US authorities too powerful to sell in China.
The Trump administration introduced new licence requirements in April that in effect ended H20 sales in China — until last week.
In the meantime, Nvidia started to explore another customised chip for China, based on its Blackwell design, that would be compliant with restrictions by stripping some features such as high bandwidth memory.
Huang, walking a tightrope between Washington and Beijing, has forged an ever-closer relationship with Trump, accompanying the president on a tour of the Gulf states in May and winning praise for Nvidia’s pledge to spend $500bn on US manufacturing over the next four years.