Trump confirms deal with Nvidia chief to let tech company sell lower-end chips to China

US President Donald Trump said on Monday that he had personally negotiated a deal with Nvidia chief executive Jensen Huang, letting the tech giant sell a lower-end chip in China in exchange for part of those sales revenues being paid to the US government. Trump did not rule out similar deals involving less-advanced versions of the company’s most hi-tech chips, describing Huang as a “brilliant guy”. The highly unusual deal was first reported on Sunday by the Financial Times. The arrangement comes amid Washington’s years-long push to restrict Beijing’s access to cutting-edge semiconductors, a policy rooted in concerns that advanced AI processors could bolster China’s military capabilities. Since 2022, Washington has imposed export controls on such chips, hitting US chipmakers hard – particularly Nvidia, the Santa Clara, California, company that is the dominant player in the industry. Speaking at a White House news conference, Trump said that the agreement centred around Nvidia’s H20 chip, which he called “obsolete” but still commercially viable. “H20 is obsolete but it still has a market,” Trump said. “So I said, listen, I want 20 per cent if I am going to approve this for you, for our country ... I don’t want it myself.” According to Trump, Huang pushed back slightly. “He said, will you make 15? So we negotiated a little deal,” Trump added. He characterised the chip as “essentially old”, and claimed that Huawei Technologies, the Chinese tech giant, already has a similar product. “And I said if I’m going to do that I want you to pay us as a country something, because I’m giving you a release,” Trump said. He emphasised that the approval was limited. “I only allowed that for H20 ... He’s coming to see me again,” he added, referring to Nvidia’s advanced Blackwell chip. “We may do this for Blackwell, but it would be a lesser version of the most powerful Blackwell chip,” he said. Trump did not mention whether Advanced Micro Devices had reached a similar deal as well, though the Financial Times, The Wall Street Journal and The New York Times all reported that it had, citing people familiar with the matter. AMD did not respond to a request for comment. In a statement to the South China Morning Post, Nvidia said that “we follow rules the US government sets for our participation in worldwide markets”. “The demand for accelerated computing is global, we’ll continue to serve as many customers as we can within the rules,” it added. Christopher Padilla, a Commerce Department undersecretary for international trade from 2002 to 2008, called the deal “completely unprecedented”. “Export controls are imposed to protect US national security, not to raise revenue for the government,” Padilla, now a senior adviser with the Brunswick Group consultancy in Washington, said. He added that in “the 80 years since US export controls became widely used during the Cold War, there has never been a case of a company paying the government for a licence to export a national-security controlled item”. Kelsey Quinn, an emerging technologies specialist at the Washington-based New Lines Institute, said that the fundamental concern is where does “this administration draw the line between legitimate national security concerns and enabling US companies to profit from China’s market”. “Now it seems there are discussions about approving yet another chip,” she added, referring to the Blackwell chip, which is reported to be cheaper than the H20 chip. According to Quinn, “each new carve out weakens our overall export control regime and sends a clear message to Beijing about this administration’s priorities” while it is guaranteed that China will continue to pursue technological self-sufficiency as a long-term strategic goal and build its home-grown chip capacities. In April, as the trade war between the US and China escalated, Trump banned the sale of the H20 chip, a less-advanced semiconductor which had been designed to avoid export control restrictions on hi-tech chips imposed by the Joe Biden administration. But Trump rescinded that decision after he met with Huang in July before the Nvidia chief headed to China on a business trip. Huang met with Trump again at the White House last week and made the deal confirmed on Monday in exchange for licences. In July, Representative John Moolenaar, the Michigan Republican who chairs the House Select Committee on China, wrote to Commerce Secretary Howard Lutnick seeking a briefing on how Commerce would handle potential export licence applications for the H20 chip. “If the US is serious about leading in AI, we need to protect our advantage – not hand it over,” Moolenaar warned. On Monday, Representative Raja Krishnamoorthi of Illinois, the committee’s senior Democrat, criticised the deal, saying that chip sales revenues in exchange for export for export licences represented a “dangerous misuse of export controls that undermines our national security”. In a statement, he added that “by putting a price on our security concerns, we signal to China and our allies that American national security principles are negotiable for the right fee”. “Chip export controls aren’t bargaining chips, and they’re not casino chips either,” he said. Earlier in the day, Trump also met with Intel CEO Lip-Bu Tan. Commerce Secretary Howard Lutnick and Treasury Secretary Scott Bessent also attended the meeting. Last week, Trump called on Tan to resign, labelling him “conflicted” after Senator Tom Cotton, Republican of Arkansas, raised concerns about Tan’s investments in Chinese chip companies and their alleged links to China’s government and military. But Trump called Monday’s meeting a “very interesting one”. He added that Tan and cabinet members will “spend some time together” and bring some suggestions to him during next week.

Trump confirms deal with Nvidia chief to let tech company sell lower-end chips to China

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}Tech giant agrees to provide US government part of H20 chip sales income; deals for other less-advanced semiconductors are not ruled out

Tech giant agrees to provide US government part of H20 chip sales income; deals for other less-advanced semiconductors are not ruled out