Donald Trump has flagged allowing Nvidia to sell chips in China that are more advanced than currently allowed, in another “deal” that would loosen export restrictions despite deep-seated fears in Washington that Beijing could harness US tech to harm national security.
At a briefing on Monday, Trump was questioned over recent revelations that he had struck an unprecedented deal with Nvidia and AMD to grant them export licenses to sell previously banned chips to China, in return for the companies giving the US government 15% of the sales revenue. The US president defended the deal, which analysts have likened to a “shakedown” payment, or unconstitutional export taxes, before adding that he was expecting further negotiations over another, more advanced Nvidia chip.
Trump said Nvidia had a “super-duper advanced” new chip, the Blackwell, with which he would not make a deal, but it was possible he would make a deal with a “somewhat enhanced – in a negative way – Blackwell”, suggesting it could be downgraded by 30-50%.
“I think he’s coming to see me again about that, but that will be an un-enhanced version of the big one,” he added, in reference to Nvidia’s chief executive, Jensen Huang, who has repeatedly met Trump about China export restrictions.
Huang has not commented on the revenue sharing deal, which covers Chinese sales of Nvidia’s H20 chips and AMD’s MI308 chips.
The H20 and MI308 chips were banned from sale to China in April, despite the lower-powered H20 being designed specifically to abide by restrictions introduced by the Biden administration. However, Nvidia said last month it had won clearance to resume shipments and hoped to start deliveries soon.
Nvidia’s chips are a major driver of the AI boom, highly sought after by both China and the US, and the deal sparked alarm among analysts and China hawks in Washington, who fear supplying China with advanced US tech could see it used against them.
“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,” John Moolenaar, the Republican head of the House China committee, told the Financial Times.
Trump on Monday defended the agreement: “I said, ‘Listen, I want 20% if I’m going to approve this for you, for the country’,” emphasising that he personally was not taking the money. He suggested Huang had offered 15%, which was agreed to.
“I released him only for the H20,” Trump said.
He described the H20 as “obsolete” and a chip “that China already has in a different form”.
But Harry Krejsa, director of studies for the Washington office of the Carnegie Mellon Institute for Strategy and Technology, said the idea H20s were “second tier” AI chips was “an outdated conception of the state of the market”.
“H20s are not the best training chips available, but they are very capable at inference, the type of computing that increasingly dominates AI workloads, especially the ‘reasoning’ models and ‘agentic’ products the field is working towards,” Krejsa told the Guardian, referring to systems which use sophisticated reasoning to autonomously solve complex problems.
“Make no mistake, lifting export restrictions on H20s means we are directly equipping Beijing with the tools it needs to compete on the AI frontier.”
The US government has for several years sought to limit supplies of technology to China that could be used in ways that threaten US national security, especially chips that can power artificial intelligence development and weapons.
China’s foreign ministry said on Monday that the country had repeatedly stated its position on US chip exports. The ministry has previously accused Washington of using technology and trade measures to “maliciously contain and suppress China”.
The revenue sharing deal is extremely rare for the US and marks Trump’s latest intervention in corporate decision-making, after pressuring executives to invest in American manufacturing and demanding the resignation of Intel’s new CEO, Lip-Bu Tan, over his ties to Chinese companies.
Trump has also flagged a 100% tariff on the global semiconductor industry, with an exemption for companies that commit to investing or building in the US.
A leading semiconductor manufacturer, Taiwan’s TSMC, announced in April it would increase its US footprint with a $100bn investment, which secured a verbal agreement from Trump that it would be exempt. However, a foreign investment of that size requires government approval from Taiwan.
The Guardian has confirmed the company has not yet applied for approval. TSMC did not respond to a request for comment.
