By Alexandra Alper
WASHINGTON, Jan 14 (Reuters) – U.S. lawmakers and former officials on Wednesday questioned President Donald Trump’s decision to allow Nvidia to sell its second most powerful AI chips in China, arguing the move erodes America’s AI edge and threatens to electrify Beijing’s military.
The Trump administration on Tuesday gave a formal green light to China-bound sales of Nvidia’s H200 chips, putting in place a rule that will likely kick-start shipments of the H200 despite deep concerns among China hawks in Washington.
Matt Pottinger, who served as a senior White House Asia advisor during Trump’s first term, told a congressional hearing that the administration is on the “wrong track” on AI and that its decision to allow the chip sales will damage its goal of winning the AI race.
Selling H200s to China “will supercharge Beijing’s military modernization, enhancing capabilities in everything from nuclear weapons to cyber warfare, autonomous drones, biological warfare and intelligence and influence operations,” he said. “Congress needs to put guardrails in place so that this mistake can’t be repeated,” he added.
Some Republican lawmakers echoed his concerns, without explicitly condemning the policy change.
“They steal so much intellectual property from this country but we don’t have to sell it to them,” Congressman Michael McCaul said, without referencing H200s specifically.
National security fears around Beijing’s access to American AI chips had prompted the Biden administration to bar sales of the prized semiconductors to China.
A spokesperson for Nvidia said “America should always want its industry to compete for vetted and approved commercial business, supporting real jobs for real Americans.”
The Trump administration, led by White House AI czar David Sacks, has said shipping advanced AI chips to China discourages Chinese competitors – such as heavily sanctioned Huawei – from redoubling efforts to catch up with the most advanced chip designs from Nvidia and AMD .
Pottinger described that notion as a “fantasy.”
It was not clear how many chips would be sold to China. Reuters reported earlier on Wednesday that Chinese customs authorities told customs agents this week that Nvidia’s H200 artificial intelligence chips are not permitted to enter the country.
The regulations released on Tuesday specify that before being exported to China, chips must be reviewed by a third-party testing lab to confirm their technical AI capabilities. China also cannot receive more than 50% of the total amount of chips sold to American customers.
Nvidia will need to certify there are enough H200s in the U.S. before shipping any to China. Chinese customers must demonstrate “sufficient security procedures” and cannot use the chips for military purposes.
At least one Republican lawmaker, Congressman Brian Mast, who chairs the House Foreign Affairs Committee holding the hearing, praised some guardrails contained in the regulations, describing “know your customer” provisions in the measure as “significant.”
In contrast, Jon Finer, who served as deputy U.S. national security advisor under former Democratic President Joe Biden, said the rules would create a sizeable new workload for the Commerce Department, which oversees export control policy, and would rely on Chinese buyers to make truthful statements about their own customers.
Democratic lawmakers were more explicit in their criticism of Trump’s policy shift.
“It’s truly like Trump is handing our opponents our coordinates in the middle of a battle,” Democratic Congressman Gabe Amo said. “Why are we giving up our advantage?” he asked the panelists.
The White House and the U.S. Commerce Department, which oversees export controls, did not immediately respond to requests for comment. The Chinese embassy in Washington and Nvidia did not immediately respond to requests for comment.
(Reporting by Alexandra Alper; Editing by David Gregorio)
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