President Donald Trump’s decision to let U.S. tech giant Nvidia sell more advanced semiconductors to China is getting pushback from some Republicans wary of giving Beijing an edge in the worldwide race to AI dominance.
The agreement, which Trump announced in a Truth Social post Monday evening, would allow Nvidia to sell its H200 artificial intelligence chips to China on the condition that the U.S. government gets 25% of the sales.
The H200 chips aren’t Nvidia’s most advanced, but are more powerful than the corporate’s H20s, which were previously developed specifically for the China market.
The White House, over the summer, gave approval for Nvidia and Advanced Micro Devices to sell their less-powerful chips to China in exchange for 15% of sales revenue. Beijing reportedly told corporations not to purchase those chips.
Chinese President Xi Jinping “responded positively” to the newest proposal, Trump wrote within the social media post.
CNBC has reached out to the Chinese Embassy in Washington, D.C., for comment.
Experts warn that giving China access to the higher chips will shrink America’s hardware advantage and help Chinese developers vastly improve their AI models and other tech.
A few of Trump’s Republican allies appear to agree.
“Alarm bells go off in my head here,” Sen. Lindsey Graham, R-S.C., told CNBC on Tuesday when asked concerning the chip sales agreement.
“I do not mind doing normal business with China. But when you can prove to me this may speed up their military capability, I’ll oppose it,” Graham said.
“My general view on that is that China’s progress on AI is sort of entirely parasitic on our technology, specifically on our hardware,” Sen. Josh Hawley, R-Mo., said on Capitol Hill earlier Tuesday.
“So I don’t need China to win the AI race. I would like to win the AI race,” Hawley said. “But when we wish to beat China, I believe we’d like to constrain their ability to leverage our own technology, and I believe we might want to cut back their access to our hardware, not increase it.”
Hawley did in a roundabout way criticize Trump, and noted that the president is aware of more information concerning the situation than he’s. “So I believe he deserves some deference here,” Hawley said.
“But I believe in the final matter I’d wish to constrain American hardware going to China,” he added.
Sen. John Cornyn, R-Texas, asked concerning the chip agreement, was more succinct.
“I’m concerned,” he said. Cornyn didn’t reply to follow-up questions.
The U.S. House Select Committee on China, a Republican-led panel formed to deal with the “threat posed by the Chinese Communist Party,” echoed Hawley’s concerns.
“Immediately, China is way behind the US in chips that power the AI race. Since the H200s are much better than what China can produce domestically, each in capability and scale, @nvidia selling these chips to China could help it catch as much as America in total compute,” the committee said in an announcement on X.
Beijing will use the H200s, which boast significantly more processing power and memory bandwidth than China’s top chips, “to strengthen its military capabilities and totalitarian surveillance,” the panel’s statement said.
“Finally, Nvidia ought to be under no illusions – China will rip off its technology, mass produce it themselves, and seek to finish Nvidia as a competitor,” the panel said. “That’s China’s playbook and it’s using it in every critical industry.”
Asked for comment on the GOP lawmakers’ remarks, White House spokesman Kush Desai told CNBC, “The Trump administration is committed to making sure the dominance of the American tech stack – without compromising on national security.”
Not all Republicans are piling on.
“I do not have an actual problem with providing them some [chips],” Sen. Thom Tillis, R-N.C., told CNBC. “But we have to know where it’s, how they’re using it, those varieties of things.”
But there’s vocal support amongst each parties for slowing China’s ability to acquire the world’s best chips.
Sen. Pete Ricketts, R-Neb., last week introduced bipartisan laws that may direct the Trump administration to disclaim export licenses for advanced chips to China and other foreign adversaries for at the least 30 months.
“The perfect AI chips are made by American corporations. Denying Beijing access to those AI chips is important to our national security,” Ricketts said in a press release unveiling the bill.
Sen. Tom Cotton, R-Ark., one among the bill’s co-sponsors, said, “It’s crucial that we protect American AI innovation from Communist China to win the AI race.”
Democrats have been sounding alarms concerning the Trump administration’s willingness to sell China higher AI chips.
Senate Intelligence Committee Vice Chairman Mark Warner, D-Va., slammed the Trump administration’s “haphazard and transactional approach to export policy,” saying it “risks squandering U.S. AI leadership and deferring to the People’s Republic of China up and down the AI stack.”
Sen. Elizabeth Warren, D-Mass., highlighted the proven fact that the Department of Justice touted a crackdown on a “major China-linked AI tech smuggling network” shortly before Trump announced the H200 sales agreement.
“Trump is letting NVIDIA export cutting-edge AI chips that his own DOJ revealed are being illegally smuggled into China,” she wrote on X.
“His own DOJ called these chips ‘constructing blocks of AI superiority,'” she noted.
Warren added that she wants Trump and Commerce Secretary Howard Lutnick to “answer to Congress on why they’re selling out US security.”
— CNBC’s Mary Catherine Wellons and Justin Papp contributed to this report.
