Trump’s Tech Reversal: Nvidia H200 Review Sparks China Policy Shift
Washington reconsiders the digital blockade.
The Silicon Valley Detente
A quiet review of Nvidia's next-generation H200 AI chips is triggering a policy reversal. The previous hardline stance on Chinese tech access faces a pragmatic overhaul. Industry pressure meets geopolitical calculus.
Chips Over Sanctions
The potential easing of restrictions isn't about goodwill—it's about market access and supply chain stability. Cutting off China from advanced semiconductors proved more complex than anticipated, threatening U.S. tech dominance and lucrative revenue streams.
The New Calculus
Strategic competition remains, but the tools are changing. Instead of a blanket ban, expect a more surgical approach: controlling specific end-uses while allowing commercial sales. It's a concession to reality, where global tech ecosystems are inextricably linked.
Wall Street analysts are already pricing in the policy pivot—because nothing accelerates a rethink faster than the sight of missed earnings projections.
Four agencies review export applications
The Commerce Department, which handles export decisions, has forwarded license requests for the chip sales to three other agencies – State, Energy, and Defense – for their input, the sources told Reuters. They spoke anonymously because the review process is not public information.
Under current rules, these agencies have 30 days to provide their assessments. An administration official told the review would be comprehensive and “not some perfunctory box we are checking.” However, TRUMP will make the final call regardless of what the other departments recommend.
A WHITE House representative would not discuss the ongoing process but stated “the Trump administration is committed to ensuring the dominance of the American tech stack, without compromising on national security.”
The Biden administration had previously blocked sales of advanced AI chips to China and other nations that might serve as pathways for smuggling the technology to Beijing. Officials cited national security risks as the reason for these restrictions.
Trump’s current stance marks a sharp change from his approach during his first presidency, when he took aggressive steps to limit Chinese access to American technology. At that time, he pointed to allegations that Beijing steals U.S. intellectual property and uses commercially-purchased technology for military purposes, claims China denies.
White House AI czar David Sacks and other Trump administration members now contend that selling advanced chips to China actually discourages Chinese companies like Huawei from working harder to match the cutting-edge designs from Nvidia and AMD.
As reported by Cryptopolitan previously, Nvidia was looking at ramping up H200 production after early orders from China exceeded available supply. While H200 chips perform slower than Nvidia’s current Blackwell processors for many AI applications, they remain widely used and have never been approved for Chinese buyers.
Trump initially considered allowing sales of a less-powerful version of Blackwell chips but changed course and settled on the H200 instead.
Congress passes sweeping investment restrictions
On the investment front, President Trump has now signed into law the most sweeping measures yet for monitoring and restricting where American dollars go in Chinese technology businesses. The provisions specifically target companies that strengthen Beijing’s military and surveillance operations.
The restrictions are included in the annual National Defense Authorization Act, which identifies entities in China and other problematic countries, Cuba, North Korea, Venezuela and Russia, working on technologies with both commercial and military uses.
“Investments propping up Communist China’s aggression must come to an end,” House Speaker Mike Johnson said earlier this month.
The House approved the NDAA last week and the Senate passed it Wednesday, both with large bipartisan support.
The law makes permanent and expands a 2023 executive order from the Biden administration. Congress is now writing into law the authority to watch, and sometimes stop, U.S. financing of Chinese work on emerging technologies including artificial intelligence, quantum computing and advanced semiconductors.
The law lets the president use International Emergency Economic Powers Act sanctions to prevent Americans from buying significant ownership stakes or debt in certain Chinese companies.
The targeted entities include those based in China, Hong Kong and Macau, state-owned businesses, and companies connected to Chinese Communist Party officials.
Even transactions that don’t get blocked will require mandatory reporting, forcing U.S. companies to notify the government about deals involving sensitive Chinese technologies.
A Chinese Embassy spokesperson in Washington criticized the legislation, saying it was “overstretching the concept of national security” and would “distort normal investment flows between the two countries.”
Senator John Cornyn of Texas, who championed the legislation over five years, stated: “Every dollar invested in China by a United States investor into a Chinese company is a dollar that’s going toward the potential production of weapons and technology that one day may be used to kill Americans.”
Senator Catherine Cortez Masto of Nevada said America’s national security future depends on “making sure we remain ahead of our adversaries in the race to develop cutting-edge technologies like AI and semiconductors.”
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