Trump administration faces backlash over Nvidia H200 AI chip sales to China

Witnesses and lawmakers at a foreign affairs hearing blasted the Trump administration’s approval for the sale of Nvidia’s H200 AI chips to China and called for it to reverse the decision, as the White House’s top technology adviser defended the move in the administration’s first public testimony discussing the latest export control measures.

Allowing China to buy Nvidia’s second most powerful AI chip is a “wrong path” that would “supercharge” Beijing’s military modernisation and damage the US’ goal to win the AI competition, former Deputy US National Security Adviser Matt Pottinger said on Wednesday at a hearing convened by the House Committee on Foreign Affairs to discuss how the US can win the AI race against China.

The Trump administration on Tuesday released new rules that would allow US chip giants Nvidia and AMD to sell certain advanced AI chips to China under a series of conditions such as having them tested in a US lab and exporting no more than half of the total amount sold domestically.

Trump announced in December that he would allow Nvidia to export its H200 chips to China with the US government getting a 25 per cent cut of sales.

The decision showed that US policy “has been seemingly reshaped by business executives who promote China as a partner and prioritise short-term profit over the national interest”, witness Oren Cass, founder and chief economist of the conservative Washington-based think tank American Compass, said at the hearing.

Lawmakers from both parties raised questions about the move. Ranking member of the committee Gregory Meeks said that there is an “overwhelming consensus” among Democrats and Republicans that the US must lead the AI race, and that by easing export controls on advanced AI chips, the administration is “ceding our advantage” in the AI race and “actively undermining our national security”.