Senate Democrats Warn Trump Over Nvidia, AMD AI Chip Deal with China

Senate Democrats have issued a formal warning to President Trump over the administration's decision to allow Nvidia and AMD to sell advanced AI chips to China. The lawmakers argue that this move runs counter to US national security interests, as it could enhance China's military capabilities. Nvidia has dismissed the concerns, while the Trump administration has dismissed the criticism outright.

Senate Democrats have formally warned President Trump over the administration's decision to allow Nvidia (NVDA) and Advanced Micro Devices (AMD) to sell advanced AI chips to China. The lawmakers argue that this move runs counter to U.S. national security interests, as it could enhance China's military capabilities. Nvidia has dismissed the concerns, while the Trump administration has dismissed the criticism outright.

The Trump administration has cleared Nvidia's H20 and AMD's MI308 chips for export to China, with the companies agreeing to share 15% of their revenue from these sales with the U.S. government. However, top Senate Democrats, including Chuck Schumer (D-N.Y.), Mark Warner (D-Va.), and Elizabeth Warren (D-Mass.), have expressed alarm over the potential consequences of this deal. They argue that it could weaken America's competitive edge in a critical sector while offering only a short-term financial gain [1].

The senators, in an open letter sent on August 15, highlighted that the administration had allowed companies to sell these chips in exchange for a 15% revenue share with the U.S. government. They warned that these chips could enhance China's military and surveillance capabilities, a claim that Nvidia has disputed. A company representative stated that the H20 chip was designed to support global AI development and that a ban on its sale had cost American taxpayers billions without delivering any tangible security benefits [3].

Despite the concerns raised by the Democrats, the Trump administration has maintained that the policy is a pragmatic approach to balancing economic and strategic interests. A White House spokesperson criticized the letter as hypocritical, noting that the previous administration had allowed similar exports without protest [4]. However, the resumption of chip sales has not led to an immediate welcome from Chinese authorities. Chinese regulators have reportedly restricted purchases of Nvidia’s H20 chips, with some companies being ordered to stop placing new orders [5].

The growing tension between national security and economic interests reflects a broader debate in U.S. foreign policy. While allowing the sale of these chips can support domestic semiconductor firms, it also raises concerns about the long-term risks of enabling a rival nation to close the technological gap. Lawmakers have not called for an outright ban but have urged the administration to impose stricter oversight and additional safeguards to mitigate potential threats [6].

The issue also underscores the increasing focus on export control policies for emerging technologies, particularly those with national defense implications. With AI at the center of the next technological revolution, the U.S. is seeking to maintain its strategic edge while addressing the risks associated with the global proliferation of advanced computing hardware [7].

As the debate continues, the administration faces mounting pressure to align its trade policies with evolving security concerns. The open letter from top Senate Democrats signals a shift in congressional sentiment and may lead to more legislative action on the issue. For now, the administration has yet to respond to the letter, but the bipartisan nature of the call for scrutiny suggests that this issue is unlikely to fade [8].

References:
[1] https://finance.yahoo.com/news/nvidia-amd-cleared-export-downgraded-200442724.html
[3] https://www.ainvest.com/news/top-senate-democrats-urge-trump-reassess-ai-chip-sales-china-security-concerns-2508/
[4] https://thehill.com/policy/technology/5457662-nvidia-amd-china-ai-chips/
[5] https://www.information.com/article/china-orders-byte-dance-alibaba-tencent-to-halt-nvidia-chip-purchases
[6] https://www.cnbc.com/2025/08/16/senate-democrats-letter-trump-advanced-ai-chip-sales-china.html
[7] https://www.thepress.net/news/national/trump-warned-by-top-senate-democrats-to-rethink-advanced-ai-chip-sales-to-china/article_3954a556-456a-5ac8-a687-7d021413c9e6.html
[8] https://www.information.com/article/china-orders-byte-dance-alibaba-tencent-to-halt-nvidia-chip-purchases