Trump Reverses China AI Chip Ban After Nvidia CEO’s Plea, Opening Door to Billions in White House Fees

The Trump administration has rolled back a major trade restriction, allowing U.S. tech giants Nvidia and AMD to resume selling certain advanced AI chips to China—reversals that could bring the White House billions in export fees but are raising national security alarms.

The policy change follows an April ban under Trump’s sweeping “Liberation Day” tariffs, which barred sales of Nvidia’s cutting-edge H20 chip to China due to security concerns. That restriction cost the company more than $5.5 billion in lost sales. But last month, Nvidia CEO Jensen Huang—whom Trump has publicly called “my friend”—met with the president to press for a reversal. Huang argued that U.S. dominance in artificial intelligence depends on competing in China, which he noted is home to over half of the world’s top AI researchers.

Just days after the meeting, Nvidia announced it had secured assurances that export licenses would be granted. Under the new arrangement, both Nvidia and AMD will pay a 15% levy on chip sales to China in exchange for access to the market. While Commerce Secretary Howard Lutnick stressed that China would only receive Nvidia’s “fourth best” chip, critics say the deal sends the wrong signal to a strategic rival.

“It’s so innovative and dynamic here in China that it’s really important that American companies are able to compete and serve the market here,” Huang told China’s state-run CGTN TV network. But national security voices were far less enthusiastic. Liza Tobin, a former Trump National Security Council official, warned, “Beijing must be gloating to see Washington turn export licenses into revenue streams. What’s next—letting Lockheed Martin sell F-35s to China for a 15 percent commission?”

The Trump administration has not detailed how it plans to use the revenue, but the move marks another about-face in the president’s turbulent trade war. On Wall Street, the frequent reversals have earned Trump the nickname “TACO”—Trump Always Chickens Out—reflecting his tendency to retreat from hardline stances when financial stakes are high.

A spokesperson for Nvidia said the company hopes the new export rules will allow America to “compete in China and worldwide,” adding, “America’s AI tech stack can be the world’s standard if we race.” The Daily Beast reports the White House, Commerce Department, and AMD have declined to comment.