- President Trump allows Chip sales to China to resume, with an important warning
- AMD and NVIDIA will have to deliver 15% of sales income
- No additional measures have been made to address national security threats.
The United States government has reversed a prohibition of the sale of the NVIDIA H20 chip and the AMD MI308 chip to China under the condition that 15% of income is paid to the United States government.
The Trump administration expanded efforts to stop China’s ability to obtain powerful chips used to develop AI models by expanding the sanctions of the Biden era to an absolute prohibition of the sale of processors.
Many security experts, including those who work under the Trump administration, have warned the Government that the sale of powerful processors to China will help it expand their efforts as consumers and military to overcome the United States.
What happened to national security?
The NVIDIA H20 and AMD MI308 processors developed to meet the restrictions of the Biden administration in the AI processing chips that could be sold in China. Restrictions were imposed on the sale of powerful chips from AI to China due to national security concerns around the development of AI models for the popular liberation army.
Trump prohibited the sale of these chips to China after a commercial dispute in April 2025, and then reversed the ban in July. Now, seeing the apparent value of sales and waiting to collect, the Trump administration is issuing an income cut of 15% for itself.
Talking to him BBCNvidia said: “We follow the rules that the US Government establishes for our participation in world markets. Although we have not sent H20 to China for months, we hope that export control rules allow the United States to compete in China and worldwide.”
It remains to be seen if this revenue reduction of 15% will be transmitted to the Chinese market by NVIDIA and AMD. But the elephant in the room still remains. What happened to the national security problem?
Deborah Elms, head of commercial policy of the Hinrich Foundation, said: “You have a national security problem or does not. If you have a 15%payment, it does not eliminate the national security problem.”
Despite the sanctions and commercial prohibitions, China has still imported powerful AI processing chips through lagoons and third parties, and is probably using chips to train AI systems that will be used for military purposes.
20 Security experts wrote a letter to the United States Secretary of Commerce, Howard Lutnick, advising against the sales of Chips to the Chinese market, adding that although most buyers would be civil companies, chips would still be used by China’s military.
“Optimized chips for AI inference will not be able to simply feed consumption or factory logistics products; they will allow autonomous weapons systems, intelligence surveillance platforms and rapid advances in decision making on the battlefield,” the letter said.
Charlie Dai, vice president and main analyst of the global investigation firm, Forrester, described the “unprecedented” agreement, also stating that “the agreement underlines the high cost of access to the market in the midst of increasing technological commercial tensions, creating substantial financial pressure and strategic uncertainty for technological sellers.”
