The US is making some concessions in the AI hardware trade restrictions it has imposed on China — and is making some money for itself in the process.
The US has allowed NVIDIA to ship its advanced H200 GPUs to China. In return, 25% of the sales proceeds will be given to the US. The GPUs will be made available to approved customers in the country.
“I have informed President Xi, of China, that the United States will allow NVIDIA to ship its H200 products to approved customers in China, and other Countries, under conditions that allow for continued strong National Security,” US President Donald Trump posted On Truth Social. “President Xi responded positively! $25% will be paid to the United States of America. This policy will support American Jobs, strengthen U.S. Manufacturing, and benefit American Taxpayers,” he added.
“The Biden Administration forced our Great Companies to spend BILLIONS OF DOLLARS building “degraded” products that nobody wanted, a terrible idea that slowed Innovation, and hurt the American Worker,” Trump said. “NVIDIA’s U.S. Customers are already moving forward with their incredible, highly advanced Blackwell chips, and soon, Rubin, neither of which are part of this deal. The Department of Commerce is finalizing the details, and the same approach will apply to AMD, Intel, and other GREAT American Companies,” he added.
The concession will help Chinese AI companies get more advanced hardware to train their models on. Chinese open-source models have been hamstrung by the lack of hardware, but are still managing to create some very capable models that are breathing down the necks of the models from the US frontier labs. In addition, these models are open-source, which has accelerated their adoption among the developer community, and now have more users than US models.
The move could be strategic from the US’s viewpoint as well. By continually giving China access to hardware, it disincentivizes China from focusing on its own hardware efforts, ensuring their continued reliance on US models. The US carefully doesn’t give access to the very best hardware, which means that China would struggle to match US labs. It’s a game of cat and mouse, and given how vitally important the AI race is, could determine how these two superpowers shape up against each other in the coming decades.