White House AI Chief says allowing chip sales to China will help counter Huawei and protect US tech dominance

White House’s AI czar David Sacks has defended the Trump administration’s decision to reverse earlier US export curbs and allow Nvidia and AMD to resume sales of artificial intelligence chips to China. He calls it a strategic recalibration to preserve America’s global tech edge.

According to an interview on Tuesday, Sacks said the move—specifically permitting Nvidia to ship its H20 chips—would help the US compete more effectively on the world stage while curbing Chinese tech giant Huawei’s efforts to dominate global markets.

Strategic pivot aims to undercut Huawei and bolster US tech supremacy

The US is not allowing the sale of its most advanced AI chips to China. Still, the policy aims to prevent Huawei from dominating the Chinese market and using that advantage to scale up and challenge American firms globally.

According to AI chief David Sacks, the strategy is deliberately nuanced and designed to serve broader economic and national interests.

The reversal is a significant win for Nvidia CEO Jensen Huang, who has spent months lobbying for relief from strict export rules.

Huang met with President Trump last week to make his case directly. “Jensen has been making the case publicly for competing in China, and there are a lot of merits to the argument,” Sacks added.

The meeting occurred last Thursday, as Nvidia became the first company to end a trading day with a market cap above $4 trillion.

The firm edged past Apple and Microsoft to reach the symbolic milestone. The stock briefly hit that level during intraday trading on Wednesday of the same week.

Trump applauded Nvidia’s stock performance in a social media post Thursday morning.

“NVIDIA IS UP 47% SINCE TRUMP TARIFFS. USA is taking in Hundreds of Billions of Dollars in Tariffs,” Trump posted on Truth Social. “COUNTRY IS NOW ‘BACK.’”

Nvidia, AMD score billions as Washington reverses AI chip ban

Late Monday, Nvidia announced it had received assurances from the US government to resume exports of certain chips to China. Advanced Micro Devices Inc., Nvidia’s main competitor, swiftly followed with a similar statement.

The approvals mark a sharp policy reversal and could bring in billions of dollars in revenue for both companies this year, just months after the Trump administration insisted the matter was non-negotiable.

Nvidia expects the reinstated H20 sales to recoup billions in lost revenue this year. The chip was initially designed to meet Biden-era export control standards. Still, the Trump administration tightened restrictions in April, requiring special licenses to sell the H20 and AMD’s MI308 chip to China.

The tougher rules forced Nvidia to take a $4.5 billion writedown on unsold H20 inventory in Q1, with an additional $8 billion in potential lost sales. AMD also projected an $800 million charge for Q2 2025.

Addressing national security concerns, Sacks dismissed the notion that resuming sales would empower China, calling the H20 “a deprecated chip.” He warned that overly rigid restrictions could backfire, pushing US allies and neutral countries toward Chinese alternatives.

“If you don’t let these countries buy American tech, you’re pushing them into China’s arms,” he said.

AI exports become a bargaining chip in US-China trade talks

Although Trump officials had previously ruled out compromise on AI chip exports, Sacks said the policy shift aligns with a broader strategy to build an “American AI stack” fully based on US-made chips, operating systems, and AI models.

Sacks noted that it’s a zero-sum game. He continued to say that they want it all to be American-made and American-powered. Sacks insisted that if they hobbled their firms, they would give China an advantage.

The decision comes after months of diplomatic back-and-forth between Washington and Beijing. In a broader trade agreement unveiled last month, the US agreed to ease restrictions on chip-design software exports in exchange for increased Chinese cooperation on rare-earth mineral sales, vital for high-tech manufacturing.

Earlier Tuesday, Treasury Secretary Scott Bessent confirmed that the H20 chip restrictions had become a bargaining chip in ongoing talks, despite previous denials of such trade-offs.

Bessent described the decision as a strategic bargaining tool used during negotiations in Geneva and London, suggesting it was part of a broader exchange in which both sides had leverage and mutual interests to pursue.

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