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After the Trump administration reversed course to allow Nvidia to resume AI chip sales to China, the chipmaker is defending the move as a win for the US. Democrats, however, argue that the move is puzzling and "stands in direct contradiction" to the White House's new AI Action Plan.
Nvidia designed its lower-power H20 chip for the Chinese market to comply with US export controls, but in April, the US restricted H20 sales to prevent the Chinese government from obtaining cutting-edge chips to power its AI ambitions.
Earlier this month, the White House lifted those restrictions. According to Nvidia, the US government has "assured" the company that licenses will be granted for the H20 sales. The company has even placed orders for 300,000 H20 chipsets with Taiwan’s TSMC to fulfill the Chinese demand, per Reuters.
"The H20 helps America win the support of developers worldwide, promoting America's economic and national security," Nvidia said in a statement. "It does not enhance anyone’s military capabilities, and the US government has full visibility and authority over every H20 transaction.”
Nvidia issued the statement after a group of Democratic senators—including Mark Warner, vice chair of the Senate Intelligence Committee—sent a letter to Commerce Secretary Howard Lutnick, criticizing the White House’s decision to lift the chip restrictions, "despite evidence that these chips" will support China’s pursuit of the next-generation AI, they wrote.
"The PRC’s [People's Republic of China's] development of advanced AI capabilities represents a clear risk to the United States national and economic security, and the administration's willingness to trade away that security is extremely troubling," the letter adds.
The Democrats are also worried the H20 will prove to be a powerful GPU, on par with Nvidia’s other leading-edge chips, despite its lower capabilities. “Indeed, by many measures the H20 performs better than other controlled chips: with the addition of high-bandwidth memory features and improved power-efficiency, many PRC firms reportedly prefer the H20 to other controlled chips,” the letter says.
The senators argue that allowing sales to China "undermines" Trump's AI Action Plan, "which purports to strengthen export control efforts on AI compute."
So far, the Commerce Department hasn’t responded to the concerns. But Nvidia CEO Jensen Huang has previously criticized the AI chip ban, which would cost the company billions in lost sales. Huang claims China will develop cutting-edge AI with or without US technology.
“Export controls should strengthen US platforms, not drive half of the world’s AI talent [China's AI researchers] to rivals,” Huang said in May, adding: “The question is not whether China will have AI. It already does. The question is whether one of the world’s largest AI markets will run on American platforms.”
AMD also plans to resume its own AI GPU sales to China. The company didn't immediately respond to a request for comment.
Huang and Su were in attendance at last week's AI Summit, where President Trump unveiled the AI Action Plan and gave both CEOs a shoutout. He didn't get into detail about specific chips; Trump said he'd "never heard" of Nvidia before this year. But in prepared remarks, he pledged to "maintain necessary protections for our national security, but we will never forget that the greatest threat of all is to forfeit the race and force our partners into rival technology."
UPDATE: The Commerce Department is also pushing back on the national security concerns with the H20 shipments to China. "The Trump Administration will consider any H20 license applications carefully, accounting for both the benefits and the costs of potential exports from America, and considering the views of experts across the U.S. Government," the department told PCMag.
"Again, this is totally different from the Biden Administration, which had no process whatsoever to monitor or limit H20 exports," the Commerce Department further alleged. However, the Biden administration did make several efforts to curb advanced chip sales to the US.