Is NVIDIA Returning to Selling AI Chips to China?
US President Donald Trump has expressed his willingness to allow NVIDIA to sell a less advanced version of its top-performing AI chip to China. During a press conference, Trump indicated the possibility of reaching a deal with NVIDIA if it could reduce the performance of its Blackwell system.
Trump said, "I could make a deal on a Blackwell processor that's somewhat improved in a negative way, meaning it's 30% to 50% less powerful."
Last month, NVIDIA CEO Jensen Huang, who had been seeking access to the Chinese market after facing restrictions, expressed a desire to sell more advanced chips to China. Huang emphasized that selling American chips in China would make Chinese companies dependent on them for AI development.
Trump indicated that he plans to meet with Huang about the Blackwell chip, emphasizing that the Blackwell system is currently unrivaled globally.
The semiconductor industry has seen significant activity following an agreement between NVIDIA and AMD with the US government. The two companies agreed to allocate 15% of their revenue from chip sales to China in exchange for export licenses. Initially, Trump had demanded 20%, but negotiations led by Huang reduced this to 15%.
If these reduced chip exports are approved, it could have a significant impact on future transactions, according to Paul Triolo of the DGA-Albright Stonebridge Group. He added that the goal of this strategy is to make China dependent on less advanced technology.
US export policies have evolved over the past few years. In 2022, NVIDIA banned the export of its A100 and H100 chips to China, which are essential components for training large AI models. Additional restrictions were imposed in 2023 on other NVIDIA chips.
Triolo confirmed that Chinese companies have stockpiled these chips and are still legally using them to train AI models, but it's unclear what capabilities the reduced Blackwell version might offer for advanced model training.
Meanwhile, Huawei is promoting its Ascend series of processors as potential alternatives to NVIDIA products. Triolo stated that Huawei is in a transitional phase, as its stocks of previous NVIDIA chips are running out and it hopes the new Ascend processors will be able to fill the gap, although they are not yet fully ready.
Triolo said, "We are at a transitional point, as our stocks of previously acquired NVIDIA chips are running out. We hope Huawei's new Ascend series of processors will be able to replace them, but it's not there yet."
Huawei is expected to launch an updated version of its 910 processors next year, which could more effectively compete with NVIDIA products.