WASHINGTON, DC -- In a potentially significant blow to U.S. national security, President Trump announced that his Administration is reversing course and will greenlight the sale of NVIDIA’s powerful H200 chips to China, the second most powerful chip it currently produces. This is a major win for China’s artificial intelligence (AI) capabilities -- including AI-enabled military capabilities -- and a financial windfall for the chipmaker, but one that could come at a steep price for long-term U.S. interests and in the near term erodes a U.S. leadership advantage in advanced AI.

This week, U.S. Senator Jack Reed (D-RI), the top Democrat on the Senate Armed Services Committee, questioned President Trump’s transactional maneuver and whether it is wise for the U.S. to lift the export controls and allow NVIDIA’s advanced chips to supercharge China’s AI factories, capabilities, and infrastructure.

“This flawed, transactional decision without a broader AI export control strategy could gift China’s military key technology gains and seems completely divorced from any consideration of America’s economic and national security interests,” noted Reed.

Congressional Republicans have also sounded the alarm. U.S. Representative John Moolenaar (R-MI), the chairman of the House’s Select Committee on Competition with China posted: “The CCP [Chinese Communist Party] will use these highly advanced chips to strengthen its military capabilities and totalitarian surveillance.”

Senator Reed joined several of his national security colleagues in panning the move as a “colossal economic and national security failure” and noting the sale of these sensitive chips to China offers the Chinese military “transformational technology to make its weapons more lethal, carry out more effective cyberattacks against American businesses and critical infrastructure, and strengthen their economic and manufacturing sector.”

Reed issued a joint statement with U.S. Senators Chris Coons (D-DE), Ranking Member on the Senate Appropriations Subcommittee on Defense; Jeanne Shaheen (D-NH), Ranking Member of the Senate Foreign Relations Committee; Elizabeth Warren (D-MA), Ranking Member of the Senate Banking Committee; Brian Schatz (D-Hawaii), Ranking Member of the Senate Appropriations Subcommittee on State and Foreign Operations (SFOPS); Andy Kim (D-NJ), Ranking Member of the Senate Banking Subcommittee on National Security and International Trade and Finance; Michael Bennet (D-CO), a member of the Senate Intelligence Committee; and Elissa Slotkin (D-MI), a member of the Senate Homeland Security and Government Affairs Committee, sounding the alarm:

“The Trump administration’s announcement that it will allow the export of advanced H200 AI chips to China is a colossal economic and national security failure. The H200s are vastly more capable than anything China can make and gifting them to Beijing would squander America’s primary advantage in the AI race.

“Access to these chips would give China’s military transformational technology to make its weapons more lethal, carry out more effective cyberattacks against American businesses and critical infrastructure, and strengthen their economic and manufacturing sector. Chinese AI giant DeepSeek said as recently as last week that the lack of access to advanced American-designed AI chips is the single biggest impediment to its ability to compete with U.S. AI companies. With this decision, President Trump is poised to remove that barrier.

“Senate Democrats and Republicans both know that the 21st century will be defined by whether the leading AI systems are built on values of free societies and free markets or the repressive, authoritarian values of the Chinese Communist Party. The Trump administration clearly doesn’t grasp the urgency of this contest. President Trump must reverse course and recommit to preserving American dominance in AI,” the eight U.S. senators stated.

In 2022, the Biden Administration imposed sweeping restrictions on sales of advanced chips to China. On December 8, President Trump reversed that policy and approved the sale of NVIDIA’s H200 chips to “approved customers” in China, in exchange for 25 percent of the NVIDIA chip sale proceeds “will be paid to the United States of America,” in some sort of profit-sharing deal. According to the Trump Administration, the U.S. Department of Commerce is currently “finalizing the details” of H200 sales and will allow other U.S. chip manufacturers to sell advanced chips to China.