By Alexandra Alper
WASHINGTON, Dec 18 (Reuters) - U.S. President Donald Trump's administration has launched a review that could result in the first shipments to China of Nvidia's second-most powerful AI chips, five sources said, making good on his pledge to allow the controversial sales.
Trump this month said he would allow sales of Nvidia's H200 chips to China, with the U.S. government collecting a 25% fee, and that the sales would help keep U.S. firms ahead of Chinese chipmakers by cutting demand
for Chinese chips.
The move drew fire from China hawks across the U.S. political spectrum over concerns the chips would supercharge Beijing's military and erode the U.S. advantage in artificial intelligence.
But questions have remained about how quickly the U.S. might approve such sales and whether Beijing would allow Chinese firms to purchase the Nvidia chips.
Reuters reported last week that Nvidia was considering an increase to production of the H200, the immediate predecessor to its current flagship Blackwell chips, after initial orders from China outstripped the current capacity.
The U.S. Commerce Department, which oversees export policy, has sent license applications for chip shipments to the State, Energy and Defense Departments for review, the sources said on condition of anonymity because the process is not public.
Those agencies have 30 days to weigh in, according to export regulations, with the ultimate decision falling to Trump if agency officials disagree. The start of the inter-agency licensing review has not been reported previously.
The Commerce Department and Nvidia did not immediately respond to requests for comment.
A White House spokesperson did not comment on the review, but said "the Trump administration is committed to ensuring the dominance of the American tech stack – without compromising on national security.”
U.S. HAD BANNED H200 SALES TO CHINA
While the H200 chips are slower than Nvidia's Blackwell chips at many AI tasks, they remain in wide use in the industry and have never been allowed for sale in China.
Trump had previously opened the door to sales of a less-advanced version of Nvidia's Blackwell chips, its cutting-edge offering, but backed away from the move and approved sales of the H200 instead.
Led by White House AI czar David Sacks, several members of the Trump administration now argue that shipping advanced AI chips to China discourages Chinese competitors like Huawei from redoubling efforts to catch up with Nvidia and AMD's most-advanced chip designs.
Trump's move represents a dramatic reversal from his first term, when he drew international attention by cracking down on Chinese access to U.S. technology, citing claims that Beijing steals American intellectual property and harnesses commercially obtained technology to bolster its military, which Beijing denies.
(Reporting by Alexandra Alper; Additional reporting by Stephen Nellis and Karen Friefeld; Editing by Peter Henderson and Jamie Freed)
