Lawmakers, former officials press Commerce over NVIDIA’s chip sales to China
Former federal officials and lawmakers are joining calls for the Commerce Department to reconsider allowing NVIDIA to resume sales of its H20 artificial intelligence chips to China, even as the tech giant says the resumption is consistent with AI guidance recently issued by the Trump administration.
Commerce initially banned sales of the H20 chips to China in April as part of enhanced export controls meant to limit Beijing’s access to advanced semiconductors. NVIDIA designed the H20 chip to comply with Biden-era restrictions, such as the AI diffusion rule, that otherwise blocked the sale of the hardware to China.
Earlier this month, however, NVIDIA CEO Jensen Huang announced that he met with President Donald Trump and other officials and said that “NVIDIA is filing applications to sell the NVIDIA H20 GPU again.”
He added that “the U.S. government has assured NVIDIA that licenses will be granted, and NVIDIA hopes to start deliveries soon.”
Lutnick similarly said that resuming sales of the H20 chips was a part of negotiations with Beijing on the shipment of rare earth minerals.
The administration’s decision to lift the ban, however, had received bipartisan pushback from lawmakers and other experts over the national security implications of providing China with renewed access to the semiconductors.
In a July 28 letter to Commerce Secretary Howard Lutnick, twenty national security experts — including former Trump 1.0 Deputy National Security Advisor Matt Pottinger and former Deputy Assistant Secretary of Defense Diana Banks Thompson, who served during the Obama administration — said the move “represents a strategic misstep that endangers the United States’ economic and military edge in artificial intelligence.”
They warned, in part, that the H20 chip “is a potent accelerator of China’s frontier AI capabilities” and that “by supplying China with these chips, we are fueling the very infrastructure that will be used to modernize and expand the Chinese military.”
The Washington Post also reported on Monday that Democratic lawmakers sent separate letters to Lutnick expressing concerns about the reversal of export controls on the H20 chips, including one led by Rep. Raja Krishnamoorthi, D-Ill., ranking member of the House Select Committee on China.
Rep. John Moolenaar, R-Mich., who chairs the House China panel, similarly warned in two speeches last week that the sale of H20 chips to Chinese firms would allow Beijing to enhance its development of AI technologies. He added that chip-focused export controls should use Chinese firms’ current semiconductor capabilities as a benchmark, rather than comparing chips to the capabilities of other U.S.-made semiconductors.
NVIDIA and administration officials have said that reversing the chip ban is consistent with U.S. policy and efforts to control China’s domestic production of advanced semiconductors.
Lutnick told CNBC earlier this month that part of the goal of relaxing the export restrictions is “to keep one step ahead of what [China] can build so they keep buying our chips.”
“So NVIDIA is driven to make sure all the developers of the world are still using their technology,” he added. “So you want to sell the Chinese enough that their developers get addicted to the American technology stack.”
A NVIDIA spokesperson also told Nextgov/FCW that criticisms of the ban’s reversal “are misguided and inconsistent with the Administration’s AI Action Plan.”
The guidance, issued by Trump last week, said, in part, that the U.S. “must continue to lead the world with pathbreaking research and new inventions in semiconductor manufacturing, but the United States must also prevent our adversaries from using our innovations to their own ends in ways that undermine our national security.”
The NVIDIA spokesperson said the H20 chips “will not enhance anyone’s military capabilities, but will help America win the support of developers worldwide,” adding that “the Administration has full visibility and authority over every H20 transaction.”
