US taking 25% cut of Nvidia chip sales “makes no sense,” experts say

The recent decision by Donald Trump to permit Nvidia to export its advanced AI chip, the H200, to China has raised significant concerns among experts and lawmakers alike. They argue that this move could potentially bolster China’s capabilities in the AI sector, giving them a crucial advantage in the ongoing technological race. While the H200 chip is less powerful than Nvidia's most advanced Blackwell chip, which remains prohibited for export to China, it is still notably more advanced than the H20, the best chip currently produced in China. Reports indicate that Huawei, China's leading AI chip manufacturer, is lagging approximately two years behind Nvidia's cutting-edge technology. By green-lighting these sales, Trump may inadvertently be aiding Chinese manufacturers in closing the technological gap, warns Jake Sullivan, a former national security advisor during the Biden administration. Sullivan expressed his astonishment to The New York Times, stating that this decision is counterproductive, as China's primary obstacle in the AI race is its lack of advanced computing resources. Sullivan emphasized, "It makes no sense that President Trump is solving their problem for them by selling them powerful American chips. We are literally handing away our advantage. China’s leaders can’t believe their luck." It appears that Trump was influenced by Nvidia's CEO Jensen Huang and his advisor David Sacks, who argued that maintaining a sales ban would primarily benefit Chinese chip makers, allowing them to capture a larger share of the market and funnel resources into research and development. By allowing Nvidia to sell its chips, the idea is that China would remain dependent on US technology, while Nvidia could potentially secure annual revenues between $10 to $15 billion, as estimated by Bloomberg Intelligence, to further enhance its own research initiatives. This strategic financial boost could theoretically help Nvidia uphold its competitive edge in the global technology arena, but concerns remain about the broader implications of such exports on international competitiveness and national security.