In a shock tweet, President Trump has announced he’ll now allow Nvidia to sell its cutting-edge H200 AI chips to China after all, in return for a 25% cut payable to Uncle Sam. These chips are ~ten times faster than the throttled H20 chips Trump re-authorised in July.
Intrigue’s initial take: This administration has wavered between two rival philosophies:
- One view (pushed by Nvidia and the White House’s David Sacks) argues it’s better to sell top AI chips to China, get it hooked on the US tech stack, undermine China’s self-sufficiency push, and thereby help the US win the tech race.
- But the other view (pushed by everyone else) warns that selling China top US chips is like a) selling Nikes and Gatorade to your running rival, or b) letting China into the WTO (the 2001 move that turbo-charged China’s rise), or even c) Lenin’s quip about capitalists selling the rope that ultimately hangs them.
And funnily enough, Trump’s own justice department just boosted that second view, arresting two of China’s H200 smugglers for “funneling cutting-edge AI technology to those who would use it against American interests.” Turns out the US will now sell it instead.
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Anyway, poorly-timed DOJ announcements aside, Trump is clearly now siding with that first view above, hence the 3% bump in Nvidia shares. And while he still nods to the national security risks (Nvidia’s newer Blackwell and Rubin chips won’t be included), we might’ve just witnessed a massive, US-backed expansion in China’s own AI compute.
The bit we’re left figuring out is what (if anything) the US might get in return.