Post by : Meena Ariff

Former President Donald Trump has granted Nvidia permission to export its advanced H200 chip to China, signaling a pivotal relaxation of the US's technology export controls aimed at China.

Trump communicated with Chinese President Xi Jinping regarding the decision, which includes a stipulation that 25 percent of sales revenue will be directed to the US government. Export will only be granted to designated "approved customers," with safeguards in place to maintain national security. Other leading chip manufacturers, such as AMD and Intel, are likely to be affected by similar policies.

"This initiative will create American jobs, boost manufacturing, and serve American taxpayers," Trump stated.

Headquartered in Santa Clara, California, Nvidia characterized the decision as a "considerate balance" benefitting high-paying jobs and local manufacturing. Following the announcement, Nvidia's shares increased by over 2 percent in after-hours trading.

This decision marks a stark contrast to the previous government's stance, which constrained Nvidia and other chip manufacturers to supply downgraded versions of their products to China. Trump criticized the former policy, which he argued compelled US tech firms to allocate billions towards products that weren't necessarily in demand.

The H200 chip, introduced in 2023, stands as Nvidia’s most potent chip aside from its latest Blackwell series, boasting nearly six times the performance of the previous H20 model. Under earlier regulations, Nvidia was required to pay 15 percent of H20 sales to the US government to adhere to the restrictions on China.

Experts suggest that Trump’s ruling aligns with market dynamics and the lobbying from Nvidia's CEO Jensen Huang. The shift appears to move from hindering China's technological progress to enhancing US market competitiveness and securing profits.

"This policy indicates a transition from limiting China’s tech growth to elevating American tech competition while generating revenue," noted Tilly Zhang, a technology analyst from China.

Nevertheless, the announcement has drawn significant backlash from Democratic leaders. Senator Elizabeth Warren condemned Trump for "compromising US security" by permitting advanced AI chips to reach China despite previous cautions regarding illegal shipments.

Tech policy analysts caution that loosening export controls could enable Chinese AI firms to bridge the gap with US technology, reinforce global cloud computing capabilities, and potentially undermine US dominance in artificial intelligence.

#Political News #Canada News #World News