Top senate democrats press Trump to reconsider AI chip sales to China

Six Senate Democrats issued an open letter on Friday urging President Donald Trump to reconsider his decision to allow tech giants Nvidia and Advanced Micro Devices (AMD) to sell AI semiconductor chips to China in exchange for a 15% revenue cut from sales. 

The letter was signed by Senators Chuck Schumer (D-N.Y.), Mark Warner (D-Va.), Jack Reed (D-R.I.), Jeanne Shaheen (D-N.H.), Christopher Coons (D-Del.), and Elizabeth Warren (D-Mass.).

The lawmakers’ letter responds to Trump’s Aug. 11 announcement that Nvidia and AMD would pay the U.S. government a 15% commission on chip sales to China in exchange for export licenses. “Our national security and military readiness relies upon American innovators inventing and producing the best technology in the world, and in maintaining that qualitative advantage in sensitive domains,” the letter states. 

Nvidia defends H20 chips amid national security concerns

The senators also warned that exporting advanced AI chips, specifically Nvidia’s H20 and AMD’s MI308, could bolster China’s military systems — a claim Nvidia disputes. In a statement to CNBC, a Nvidia spokesperson said: “The H20 would not enhance anyone’s military capabilities, but would have helped America attract the support of developers worldwide and win the AI race. Banning the H20 cost American taxpayers billions of dollars, without any benefit.” AMD did not immediately respond to requests for comment.

The Democrats asked the administration for a detailed response by Friday, Aug. 22, regarding the current Nvidia and AMD deal and any similar arrangements with other companies. “We again urge your administration to quickly reverse course and abandon this reckless plan to trade away U.S. technology leadership,” the letter concludes.

The Trump administration, however, appeared to dismiss the national security concerns. “It’s quite rich to see Democrats and irrelevant ‘experts,’ who were totally MIA when Joe Biden’s administration let H20 chips and other advanced technologies freely flow to China, now pretend to care about our national and economic security,” White House spokesman Kush Desai told CNBC.

China restricts Nvidia purchases despite U.S. export approvals

Even with Trump permitting the chip sales to resume, China has not fully welcomed Nvidia’s return. Bloomberg reports that Chinese authorities are encouraging tech companies to avoid U.S. chips. “We’re hearing that this is a hard mandate, and that [authorities are actually] stopping additional orders of H20s for some companies,” said Qingyuan Lin, a senior analyst covering China semiconductors at Bernstein. 

Separately, The Information reported that Chinese regulators have ordered major tech firms, including ByteDance, Alibaba, and Tencent, to halt Nvidia chip purchases until a national security review is completed.

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