U.S. President Donald Trump has expressed openness to Nvidia Corporation's (NASDAQ:NVDA) proposal to sell a downgraded version of its next-generation Blackwell AI chip to China, with performance reductions of up to 50%, despite concerns over national security.
Nvidia Could Get Go Ahead To Sell Blackwell In China, Albeit With Conditions
On Monday, President Trump revealed that he may allow Nvidia to sell a scaled-back version of its Blackwell AI chip in China, subject to a significant reduction in computing power, reported Reuters.
The adjustment would lower the chip's capabilities by 30-50%, making it a weakened version compared to the original design intended for global markets.
“I think he’s coming to see me again about that, but that will be an unenhanced version of the big one,” Trump told reporters, referring to Nvidia CEO Jensen Huang.
However, Trump was clear about the need to keep U.S. interests in mind, stating that the chips’ capabilities would need to be significantly downgraded to avoid boosting China’s AI capabilities.
He added that the modified version would be an "enhanced-in-a-negative-way" Blackwell chip, signaling a compromise between economic interests and national security concerns.
The suggestion comes amid ongoing discussions between Nvidia and the Trump administration, which is evaluating the national security implications of China gaining access to cutting-edge AI technology.
Is Nvidia Working On A Lower Grade Blackwell Chip For China?
In May, it was reported that Nvidia was working on a new, lower-cost version of its latest Blackwell AI chips tailored for the Chinese market.
The company has not confirmed the chip's development or revealed how its performance compares to its U.S. counterparts. The U.S. flagship Blackwell chip, introduced in March, is capable of running up to 30 times faster than its previous generation.
China continues to be a key market for Nvidia, contributing 13% of the company's revenue in the last fiscal year.
Trump Defends Revenue-Sharing Deal With Nvidia, AMD Over China Chip Sales
On the same day, Trump also defended the rare revenue-sharing agreement that requires Nvidia and Advanced Micro Devices, Inc. (NASDAQ:AMD) to hand over 15% of their China sales to the U.S. government.
The arrangement follows his administration's decision last month to approve exports to China of Nvidia's less advanced H20 AI chips, despite an earlier ban in April.
"The H20 is obsolete," Trump said, stating that China already had access to it. "So I said, ‘Listen, I want 20% if I'm going to approve this for you, for the country.'"
The final deal was settled at 15%.
Meanwhile, China's foreign ministry reiterated its opposition to U.S. technology and trade restrictions, accusing Washington of trying to "maliciously contain and suppress" the country's development, the report added.
Price Action: On Monday, Nvidia's stock dipped 0.32%, followed by a further 0.038% drop in after-hours trading, reaching $182.08 at the time of writing, according to Benzinga Pro.
Benzinga's Edge Stock Rankings show that NVDA continues to exhibit a solid upward trend across short, medium and long-term periods. Further performance insights can be found here.
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
