The Trump administration has begun a formal review that could authorise the first shipments of Nvidia’s second-most powerful artificial intelligence chips to China, five sources told Reuters. The move follows President Donald Trump’s recent pledge to permit the controversial sales under strict oversight and a 25% government fee.
Trump announced earlier this month that sales of Nvidia’s H200 chips would be allowed to China, arguing the measure would help sustain U.S. leadership in advanced semiconductors while reducing reliance on Chinese-made chips. The decision, however, has provoked criticism from both Republican and Democratic lawmakers who warn that such exports could enhance Beijing’s military capabilities and undermine America’s technological edge.
Inter-Agency Review Underway
According to sources familiar with the process, the U.S. Commerce Department has submitted Nvidia’s export licence applications to the Departments of State, Energy and Defense for evaluation. Each agency has 30 days to provide its recommendations, as required by export control regulations.
One administration official said the review would be comprehensive and “not some perfunctory box we are checking.” Despite the multi-agency scrutiny, the final decision ultimately lies with President Trump.
Neither Nvidia nor the Commerce Department responded to requests for comment. The White House also declined to discuss the specifics of the review but reiterated its commitment to maintaining U.S. dominance in the “American tech stack” while safeguarding national security.
Shift from Biden-Era Policy
The proposed approval represents a sharp departure from former President Joe Biden’s stringent export restrictions, which banned the sale of advanced AI chips to China and neighbouring countries deemed potential transshipment hubs. Those curbs were introduced over fears that cutting-edge chips could bolster China’s military and surveillance systems.
During his first term, Trump had also taken a hard line on technology transfers to Beijing, accusing China of intellectual property theft and using civilian technologies for military gain claims that China denies. His current approach marks a notable policy reversal.
Divided Expert Opinions
Critics say the proposed exports could erode U.S. strategic advantages in artificial intelligence. Chris McGuire, a former National Security Council official under Biden and senior fellow at the Council on Foreign Relations, described the move as “a significant strategic mistake.”
“The H200 chips are the one thing holding China back in AI,” McGuire said. “I cannot possibly fathom how Commerce, State, Energy and Defense could certify that exporting them serves U.S. national security interests.”
However, some Trump officials, led by White House AI adviser David Sacks, argue that limited sales could dissuade Chinese firms such as Huawei from accelerating efforts to close the technology gap. They contend that carefully managed exports would sustain American commercial dominance while keeping Chinese innovation dependent on U.S. suppliers.
Industry and Strategic Implications
Nvidia is reportedly considering ramping up production of the H200 following strong demand from Chinese clients, whose preliminary orders have already exceeded current capacity. Though the H200 is less powerful than Nvidia’s latest Blackwell model, it remains integral to global AI development and has never previously been authorised for sale in China.
Trump had initially floated the idea of permitting exports of a less advanced variant of the Blackwell chips but later shifted focus to the H200, framing the decision as a balanced approach between commercial and security priorities.
The outcome of the inter-agency review is expected to set an important precedent for U.S.–China technology trade relations and the future of global AI competition.
(with inputs from Reuters)
