Nvidia defends H20 GPU sales to China amid criticism from Democratic senators

Nvidia has defended itself against recent criticism over a decision by President Donald Trump's administration to grant licences to the company to sell its H20 graphics processing unit (GPU) to China.

The response comes after a group of Democratic senators on Monday urged the Commerce Secretary Howard Lutnick, who largely crafts export policies, to reverse course on the licences.

The lawmakers said a decision to sell H20 chips to China was "an abrupt departure" from the administration's position in April that Beijing's access to the processors posed a serious national security risk.

"And it undermines the administration's recent Al Action Plan, which purports to strengthen export control efforts on Al compute,” the letter states, referring to Mr Trump's AI strategy that included 90 federal policy actions.

The senators also warned that such policy reversals would bolster China's push to use AI to “strengthen military systems”.

The letter is the latest in a back-and-forth battle over how to best protect and promote US AI technology.

“The H20 helps America win the support of developers worldwide, promoting America's economic and national security,” an Nvidia representative told The National.

“It does not enhance anyone’s military capabilities, and the US government has full visibility and authority over every H20 transaction.”

Shortly after a trip to Beijing this month, Nvidia's chief executive Jensen Huang highlighted the Trump administration's assurances about resuming sales of the H20 to China, and said deliveries would begin soon.

The H20 is designed to comply with US regulations that seek to prevent powerful AI technology from being used by countries it views as adversaries. But in recent years, and particularly during former president Joe Biden's administration, the US has sought to clamp down on the export of AI technologies to a greater degree, especially CPUs and GPUs, which have become critical for countries seeking to build up AI infrastructure.

Nvidia came out in January against the stronger export controls proposed by Mr Biden, saying these undermined US leadership in AI with a “regulatory morass”.

Since his inauguration, Mr Trump has taken a softer approach to AI-related export controls. Recent deals announced with the UAE to build an AI data centre, which also included security stipulations to prevent the potential diffusion of US technology to adversarial countries, was widely seen as a win for US technology companies that have largely opposed strict export policies.

Despite efforts in recent years to prevent the diffusion of US AI technology, some analysts have cast doubt on the effectiveness of the overall policy.

A new report from Jefferies, an investment banking and capital market firm based in New York, indicated that strict US export policies had prompted China to recalibrate and build up its own chip-making capability, with companies like Huawei and Semiconductor Manufacturing International Corporation making strides.

Regardless, in their letter to Mr Lutnick, the senators maintained that “restricting access to leading-edge chips has been the defining barrier for China's efforts to achieve Al parity”, expressing concern that the Trump administration would make further exceptions to loosen various export policies it once advocated.

“This administration is permitting adversaries access to technologies critical to national security as part of trade discussions without consultation or input from Congress,” they wrote.

A spokesperson with the US Department of Commerce said Biden administration didn't impose “any restrictions on the H20 whatsoever and they flowed freely into China,” adding that the Trump White House was the first to implement a licence requirement for the exports to Beijing.

“The Trump administration will consider any H20 licence applications carefully, accounting for both the benefits and the costs of potential exports from America and considering the views of experts across the US Government,” the Commerce Department spokesperson told The National.

White House officials have recently indicated that policies seeking to prevent the export of US AI technology might ultimately backfire.

“We don't want to create demand for Huawei,” White House AI chief David Sacks said during a round-table discussion at the Pennsylvania Energy and AI Summit.