President Donald Trump upended decades of U.S. national security policy, creating an entirely new category of corporate risk, when he made a deal with Nvidia to give the U.S. government a cut of its sales in exchange for resuming exports of banned AI chips to China.
Historically, the U.S. government made decisions to control the export of sensitive technologies on national security grounds. Those decisions were viewed as non-negotiable; if a technology was controlled, companies could not buy their way around those controls, no matter how lucrative the foregone foreign sales.
On Monday, Trump raised the prospect of ending that era, saying he would allow Nvidia to sell its H20 chips to China in exchange for the U.S. government receiving a 15% cut of the company’s sales of some advanced chips in that country. He made a similar deal with Nvidia’s smaller rival AMD.
He also told reporters he was open to allowing Nvidia to sell a scaled-down version of its current flagship Blackwell chips to China. Months earlier, his own administration had banned the sale of H20 chips to China, reversing the decision in July as part of what the government said were negotiations on rare earths.
The latest move drew condemnation from U.S. lawmakers in both parties who warned that it risked creating a pay-for-play framework for the sale of sensitive technologies to U.S. adversaries, a concern echoed by analysts and legal experts.
“Export controls are a frontline defense in protecting our national security, and we should not set a precedent that incentivizes the government to grant licenses to sell China technology that will enhance its AI capabilities,” said U.S. Representative John Moolenaar, a Michigan Republican who chairs the House Select Committee on China.
Representative Raja Krishnamoorthi of Illinois, the ranking Democrat on the same committee, said 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.”
To be sure, the Trump administration has said the national security risks of resuming H20 sales are minimal because the chip was sold widely in China.
U.S. Commerce Secretary Howard Lutnick last month described the H20 as Nvidia’s “fourth-best chip” in an interview with CNBC. He said it was in U.S. interests for Chinese firms to keep using American technology.