Nvidia's H200 AI chip sales to China face scrutiny on national security grounds

Days after U.S. President Donald Trump allowed Nvidia's advanced chip sales to China, the incumbent U.S. administration has now launched a review of Nvidia's H200 AI chips being sold to the rival nation, reportedly due to a policy shift.

Trump recently gave his approval to these sales, on the condition that a 25% cut would go to the U.S. government, asserting that the move would maintain U.S. technological superiority over Chinese chipmakers.

The decision has nevertheless drawn criticism from U.S. lawmakers lamenting that these chips could improve China's military capabilities and undermine American advantages in artificial intelligence (AI).

Concerns are also raised regarding the speed of approval for these sales and whether Chinese firms will be permitted to purchase the chips.

The U.S. Commerce Department has forwarded license applications for the sales to the State, Energy, and Defence Departments for review, which means that a thorough examination process is underway. However, the final decision rests with Trump.

Citing a White House spokesperson, Reuters reported that the administration is committed to maintaining the dominance of American technology without compromising national security.

This initiative differs from the Biden administration's restrictions on advanced AI chip sales to China, also driven by national security concerns. Critics

The US-based chip maker is considering increasing production of the H200 chips in response to rising demand from China, despite these chips not having been authorised for sale in the country before.

In light of these developments, it appears the ongoing tensions surrounding U.S.-China technology relations will not soon settle.