Donald Trump said he will consider allowing Nvidia to sell a more advanced artificial intelligence chip in China, after confirming he had “negotiated a little deal” to give Washington a share of the chipmaker’s revenues from the country.
The unprecedented deal Trump struck with Nvidia’s chief executive Jensen Huang, revealed by the FT on Sunday, involved the US taking 15 per cent of Chinese sales of its H20 processor, which it introduced in 2023 to comply with Biden-era controls on AI chips.
The performance of the H20 chips sold to China is restricted, compared with those available to US customers.
The H20 is based on Nvidia’s older Hopper architecture, but Trump on Monday said that he planned to discuss a new deal with Huang to allow it to sell chips to China based on its latest Blackwell platform.
Approval would unlock billions of dollars in sales for Nvidia after years of lobbying by Huang for access to the Chinese market, despite national security concerns in Washington.
The president said the Blackwell chips would be “enhanced in a negative way” for sale in China, comparing the potential sales to the way the US sells downgraded versions of its most advanced fighter jets.
“It’s possible I’d make a deal,” the president said during a press conference. He described the H20 as “an old chip that China already has”.
“On the Blackwell, I think he [Huang] is coming to see me again about that,” he added.
The Trump administration’s unprecedented agreement with Nvidia and rival AMD to pay a share of their Chinese revenues to the US government has triggered shockwaves from Washington to Beijing as the president continues to upend long-standing corporate norms.
People familiar with the situation said some national security officials in the Trump administration were considering resigning over the signals that the president has sent in recent days about allowing China to obtain advanced American technology.
Trump’s comments about Blackwell suggest that the US president is abandoning the tough export controls that the Biden administration imposed to make it harder for China to access advanced chips that can be used for everything from modelling nuclear weapons to developing hypersonic weapons.
There is currently no version of Nvidia’s Blackwell chip legally available in China under US export controls. Nvidia declined to comment on Trump’s remarks about Blackwell.
“We may look back on this as the moment America voluntarily chose to subsidise our own strategic decline — handing Beijing the very AI chips that gave us our edge in the most consequential technology race of our time,” said Liza Tobin, a China expert at the Jamestown Foundation who served on the National Security Council in the first Trump administration.
Trump’s remarks come as US and Chinese officials continue trade negotiations that the president hopes will lead to a summit with his Chinese counterpart Xi Jinping.
The Financial Times reported last month that the US commerce department has been told to freeze new export controls on China to avoid jeopardising the chances of his summit with Xi.
The highly unusual deal Trump struck with AMD and Nvidia has prompted surprise among experts and outrage among political opponents.
“The arrangement is shocking,” Michael Sobolik, senior fellow at the Hudson Institute and a specialist in US-China relations. “Not only because of the national security implications, but because this just hasn’t happened before. Pay-offs aren’t supposed to be a precondition for foreign commerce.”
Trump’s political opponents blasted the move for undermining US security, with senior Democrats slamming it as a “dangerous misuse of export controls”.
“This arrangement raises critical questions the administration must answer immediately, including what legal authority it has for extracting revenue-sharing as a condition for export licences,” said Raja Krishnamoorthi, the top Democrat on the House China committee.
Legal experts cautioned that the arrangement was likely to end up in front of a court.
Aaron Bartnick, a former White House national security and technology official, described the deal as “wild”, adding that it was unclear if the agreement was legal given that the constitution’s export clause bans taxes or duties on exports.
“This is essentially just a kickback to the federal government for allowing Nvidia and AMD to undermine US national security,” said Bartnick, now at Columbia University’s Center on Global Energy Policy.
Nvidia and AMD did not respond to questions about whether they had conducted internal analysis to determine whether the arrangement posed any legal problems.
Nvidia’s H100 and its Hopper family of chips became Silicon Valley’s most sought-after commodity after the breakout success of OpenAI’s ChatGPT in 2022, becoming the default option for Big Tech companies and start-ups to train new AI models.
Chips based on its successor, Blackwell, started shipping late last year but were deemed by US authorities too powerful to sell in China.
The Trump administration introduced new licence requirements in April that in effect ended H20 sales in China — until last week.
In the meantime, Nvidia started to explore another customised chip for China, this time based on its Blackwell design, that would be compliant with the latest restrictions by stripping certain features such as high bandwidth memory, or HBM.
Huang, walking a tightrope between Washington and Beijing, has forged an ever-closer relationship with Trump, accompanying the president on a tour of the Gulf states in May and winning praise for Nvidia’s pledge to spend $500bn on US manufacturing over the next four years.
At the same time, Huang has courted Beijing, which recently raised concerns about potential security risks with the H20. Nvidia has denied allegations in Chinese state media that its chips have a “back door” allowing remote access and a “kill switch” that could allow them to be deactivated.
