When President Trump announced a reversal of U.S. export restrictions on Nvidia and AMD’s AI chips to China, many expected Beijing to celebrate. Instead, China’s response has been cold, cautious, and even critical. The move, which forces U.S. chipmakers to hand over 15% of sales revenue to the government, has sparked controversy at home and skepticism abroad—raising new questions about the future of the global AI race.
The Deal: AI Chips for Cash
Under the new rules, Nvidia’s H20 and AMD’s MI308 chips—previously banned for export to China on national security grounds—can now be sold freely. But there’s a catch: Washington collects 15% of revenue from those sales, essentially turning sensitive technology exports into a revenue-sharing arrangement.
For U.S. companies, it means regaining access to a multi-billion-dollar Chinese market. For the government, it’s a financial cushion and a way to maintain leverage. For critics, though, it’s a dangerous precedent—trading away security for short-term profit.
Backlash in Washington
Not everyone is on board. Lawmakers like Chuck Schumer and Elizabeth Warren slammed the decision, warning that even “civilian-grade” AI chips could bolster China’s military and surveillance ambitions. They argue that monetizing export restrictions undermines U.S. credibility and risks weakening safeguards designed to protect national security.
China’s Surprising Reaction: No Thank You
Instead of rushing to buy, Beijing has been publicly downplaying Nvidia’s chips:
- State media labeled them “inferior” and “environmentally harmful.”
- Regulators launched a cybersecurity review of Nvidia’s H20 chip, stoking speculation about possible backdoors or kill switches.
- Tech giants have been encouraged to double down on domestic chipmakers like Huawei and Cambricon, pushing for long-term self-reliance.
The message is clear: China sees this as another reason to accelerate independence from U.S. tech.
The Bigger Picture: The AI Cold War
This isn’t just about chips. It’s about who controls the future of artificial intelligence powerhouses—and by extension, global influence.
- For the U.S.: The deal buys time for Nvidia and AMD but raises uncomfortable questions about whether America is prioritizing profits over security.
- For China: The skepticism signals a deeper strategy—using U.S. concessions as a bridge while building a self-sufficient AI ecosystem.
- For the world: It highlights the fragile balance between economic cooperation and geopolitical rivalry in the tech sphere.
FAQs
| Q | A |
|---|---|
| What changed? | Trump lifted the ban on Nvidia and AMD’s advanced AI chips to China, but added a 15% government revenue cut. |
| Why is this controversial? | Critics argue it monetizes national security, undermines U.S. export control credibility, and risks empowering China’s tech sector. |
| Why isn’t China celebrating? | Beijing is skeptical—labeling the chips as risky, inferior, and doubling down on domestic alternatives. |
| Could this help China’s military indirectly? | Possibly. While chips are “civilian-grade,” their computing power could still be applied in military AI systems. |
| Does this mean the U.S. is losing the AI race? | Not yet—but the power struggle is shifting. China is accelerating its path to independence while America debates between profit and protection. |
Bottom Line
Trump’s chip deal may be a short-term win for Nvidia and AMD, but it’s no victory lap for U.S. strategy. China’s muted reaction signals a bigger shift: the AI race is no longer just about access to hardware—it’s about who can build an ecosystem strong enough to stand alone.
Sources CNN
