Trump says he's open to letting Nvidia sell a downgraded version of its most advanced chip to China

In a recent press conference, U.S. President Donald Trump expressed a willingness to permit Nvidia to market a less powerful version of its cutting-edge artificial intelligence chip to China. He mentioned that he might negotiate with Nvidia if they could modify the performance of their Blackwell system. "It's possible I'd make a deal" regarding a "somewhat enhanced — in a negative way — Blackwell" processor, Trump noted, suggesting a performance reduction of 30% to 50%. Trump also indicated that he plans to meet with Nvidia CEO Jensen Huang to discuss the Blackwell chip further. He acknowledged the Blackwell system as the "latest and the greatest in the world." Last month, Huang, who has been advocating for access to the Chinese market after facing significant restrictions, expressed his hopes of selling more advanced chips to China. The ongoing negotiations around semiconductors follow a recent agreement between Nvidia and AMD to share 15% of their revenue from chip sales to China with the U.S. government in exchange for export licenses. Initially, Trump had requested a 20% cut, but this was negotiated down to 15% following discussions with Huang. If the downgraded Blackwell chips receive export approval, it could significantly impact future dealings, according to Paul Triolo, a partner and senior vice president at DGA-Albright Stonebridge Group. Triolo remarked that the strategy seems aimed at making China reliant on less advanced technology. Huang has consistently argued that denying China access to American chips could allow domestic companies like Huawei to fill that gap. He believes U.S. chips should be available in China to ensure their dependency while developing AI technologies. The U.S. chip export policies have changed considerably over the years. Nvidia faced restrictions in 2022, barring it from exporting its A100 and H100 chips essential for training large AI models. Moreover, in 2023, additional curbs were placed on more Nvidia semiconductors. Chinese firms have managed to stockpile these chips and continue to utilize them for AI development. Triolo noted that while the exact specifications of a downgraded Blackwell system for China remain uncertain, it is yet to be seen if it would effectively support training more sophisticated models. Meanwhile, Huawei continues to advance its Ascend series of processors, aiming to establish them as a viable alternative to Nvidia's offerings. Triolo added that there is a transition phase where reliance on earlier Nvidia GPUs is waning, and there's hope that Huawei's new Ascend processors will be able to fill that gap, although they have not yet reached that capability. He anticipates that Huawei's upcoming version of its 910 processors, expected next year, will be more competitive with Nvidia's technology.