Nvidia Negotiates Chip Sales with Trump Administration
President Donald Trump noted on Monday that he initially requested Nvidia to reduce its chip sales to China by 20%. However, after discussions with CEO Jensen Huang, that percentage was lowered to 15%.
This announcement came after reports indicated that Nvidia had agreed to pay the federal government a 15% fee in exchange for an export control license, allowing the sale of its H20 chips to China and Chinese companies. Huang met with Trump at the White House on Friday.
Trump stated, “I said, ‘If you listen and approve this for you, I want 20%,” during a press conference in Washington. He further characterized Nvidia’s H20 chip as “an old chip that China already has” and called it “outdated.” The president indicated that he would only allow the sale of the H20 chip if it underwent a significant downgrade in performance, suggesting reductions of 30% to 50% compared to the advanced Blackwell chip, which he described as “super-large altitude.” He emphasized, “It’s the latest in the world and the greatest in the world. No one has it.”
Concerns over US export controls stem from fears that supplying China with advanced chips could give them an edge in artificial intelligence (AI) capabilities, representing a potential threat to national security. Trump mentioned that China has a chip with comparable capabilities to the H20.
Huang argued that if Chinese AI developers utilize American technology, it would benefit US national security by hindering their access to Nvidia’s chips, thus encouraging the growth of the Chinese chip industry. He explained, “He essentially sells old chips. Huawei has a similar chip.”
The H20 is specifically designed for China and is not very powerful. This was introduced following the Biden Administration’s AI chip export controls set in 2023. In April, the Trump administration announced that a license would be required for exporting H20 chips. In May, Huang remarked that this would “effectively close” the market, estimating Nvidia could have made around $8 billion in H20 chip sales during the upcoming quarter before halting shipments.
An Nvidia spokesperson mentioned that they have not shipped H20 chips to China for months but remain optimistic that export regulations will enable fair competition with China globally.
Trump hinted that Huang might return to negotiate on the Blackwell chip export license, saying, “I think he’ll come see me again about it.” White House officials confirmed that Advanced Micro Devices, the other leading AI chip maker, had also agreed to pay 15% to obtain an export license for their Instinct MI308, focused on the Chinese market.
