Nvidia Cleared To Sell Powerful H200 Chips to China in US Policy Shift

Nvidia AI Chips Headed for China

Transcript

00:00NVIDIA CEO Jensen Huang may be taking a victory lap, following U.S. President Donald Trump's

00:11announcement that he is allowing NVIDIA to sell its second-most powerful chip, the H200,

00:17to Chinese customers in exchange for a 25 percent fee paid to the U.S. government. It

00:22reverses years of U.S. tech policy and represents a major win for Jensen Huang.

00:27President Trump basically said that the Biden policy of forcing companies to degrade their chips

00:36to sell abroad was a fail policy. So he has essentially bought the argument that Jensen

00:43Huang and others have been making that this is not a good approach. While the H200 isn't NVIDIA's

00:52latest model, it's still more powerful than anything China has, and a major upgrade from

00:57the watered-down chips like the H20 NVIDIA tried selling there before. Huang has argued that

01:02the U.S. should not abandon the China market, and that this will only hurt American companies

01:07and cut off access to the vast amount of AI talent in China. But supporters of the ban say giving

01:12China access to advanced chips is a national security threat, and it will boost China's

01:17military. Trump's decision has received pushback from both sides of the aisle. One group of Democratic

01:23senators called it a colossal economic and national security failure, while the Republican chair of

01:28the House Select Committee on China said Beijing would end up ripping off NVIDIA's tech and ending

01:34NVIDIA as a competitor. Then there's the 25 percent fee. Since export taxes are illegal in the U.S.,

01:40NVIDIA will reportedly pay the fee as an import tax when the Taiwan-made chips enter the U.S.

01:45before re-exporting them to China. But lawyers warn the plan is legally shaky.

01:51I think the next step, the most important thing, is going to be sorting out the question of this

01:56fee. Figuring out a way to make this work, given the very narrow legal space that exists,

02:04is going to be the most important problem to solve at this point to make this policy a reality.

02:10While lawyers fight over the details, Trump says Chinese President Xi Jinping has already

02:15responded positively to the deal. So for now, it seems the era of total chip control is over,

02:22and the era of pay-to-play has begun.

02:25Klein Wong, Patrick Chun, and Chris Gorin for Taiwan Plus.