Trump Considers Allowing NVIDIA, AMD to Export Downgraded AI Chips to China

U.S. President Donald Trump has indicated that he may allow NVIDIA (NVDA.US) and AMD (AMD.US) to export downgraded versions of their advanced AI chips to China. During a media interview, Trump mentioned that if the performance of NVIDIA's new Blackwell processor is adjusted, he would consider approving the relevant export agreements. The chip's performance could be reduced by 30% to 50%.

In a subsequent briefing, Trump responded to earlier reports about reaching export license agreements with NVIDIA and AMD. According to these reports, the agreement would allow the export of previously banned chips to China, with the U.S. government receiving 15% of the sales revenue from these products in exchange. Trump defended the agreement, revealing that he initially demanded a 20% share but eventually accepted a 15% counteroffer from NVIDIA CEO Jensen Huang. Trump emphasized that the agreement applies only to the H20 chip, stating that the technology is outdated and that China has already acquired similar products through various means.

Trump also mentioned that Huang had discussed the export restrictions with him multiple times in person and would continue to do so. The negotiations would involve significant adjustments to the non-upgraded versions of the chips. Public information indicates that Huang had previously communicated with Trump's team on the issue of export controls.

The underlying motive for this policy shift is the U.S.'s concern over its rare earth supply chain. Given that the U.S. heavily relies on China for the production and processing of rare earths, defense giants like Lockheed Martin face the risk of halting aircraft production due to shortages. This has directly prompted the Trump administration to restart technology export negotiations. Notably, this policy relaxation does not affect the export restrictions on 14nm and below process equipment and advanced AI chips.

The U.S. Department of Commerce has initiated the relevant approval process, but the specific use of the funds has not been clarified. Analysts have expressed a negative view on the reports that NVIDIA and AMD would need to hand over 15% of their AI chip sales revenue to the U.S. government in exchange for export licenses. They argue that this agreement sets a bad precedent but acknowledge that "getting 85% is better than getting nothing."