The United States is embroiled in a heated debate over national security and legality following President Donald Trump’s indication that Nvidia could be permitted to sell downgraded versions of its latest artificial intelligence (AI) chips to China. The announcement has raised alarms across political and industrial circles, with critics warning that such a move could undermine U.S. national security.
In recent remarks, President Trump suggested a potential deal to allow Nvidia to export lower-performance versions of its cutting-edge Blackwell chips to China, a move likened to selling downgraded military technology to foreign nations. This comes after the Trump administration previously lifted a ban on Nvidia’s H20 chips, a less advanced version designed to comply with U.S. export regulations, following China’s agreement to relax rare earth export restrictions.
The controversy deepened with revelations that Nvidia and competitor AMD agreed to remit 15% of their China export revenue to the U.S. government as a condition for export approval. This unprecedented arrangement has been met with bipartisan criticism, with lawmakers expressing concern over the implications for national security and the precedent it sets for future export controls.
Representative John Moolenaar, a Republican, emphasized the importance of maintaining strict export controls to protect national security, while Democrat Representative Raja Krishnamoorthi condemned the commodification of security principles, warning that it sends a dangerous signal to China and U.S. allies.
Further complicating matters, the legality of the revenue-sharing agreement is under scrutiny. The U.S. Constitution prohibits taxes on exports, and the Department of Commerce’s Bureau of Industry and Security is barred from imposing fees on export license applications. Legal experts and former national security officials have questioned whether the arrangement constitutes an illegal export tax.
As the debate continues, concerns grow over the long-term impact of these policies on U.S. technological leadership and strategic interests. The Financial Times has reported that some security officials are considering resigning in protest, viewing the deal as a detrimental shift in U.S. export control strategy.
The unfolding situation highlights the complex interplay between economic interests and national security in the rapidly evolving field of AI technology, with significant implications for U.S.-China trade relations.
