Nvidia's H20 AI Chips May Escape Export Controls Temporarily

Nvidia's H20 AI Chip Escapes Export Restrictions in Deal with Trump Administration

Nvidia CEO Jensen Huang has reportedly secured an agreement with the Trump administration, allowing the company to continue exporting its H20 AI chips to China. This move comes after Huang promised to invest in new AI data centers within the United States. The deal was allegedly struck during a dinner at Trump's Mar-a-Lago resort last week, according to NPR. Nvidia has chosen not to comment on the matter.

The H20 chip, which is the most advanced AI chip Nvidia can export to China due to its modified, lower performance specifications, was at risk of facing export restrictions. This concern arose because the H20 was reportedly used by the China-based company DeepSeek to train its R1 open AI model. Launched in January, R1 garnered attention for outperforming models from U.S.-based AI labs, including those from OpenAI.

Despite bipartisan calls from U.S. Senators for restrictions on the H20, and reports that the Trump administration was initially preparing to impose export controls, the course was reversed following Huang's proposal. This decision seems to contradict the administration's aim to maintain U.S. dominance in AI technology.

Adding to the complexity, the Trump administration has decided to maintain the AI chip export rules established by former President Joe Biden in January. These rules impose export limits on nearly all countries outside the U.S., with stricter measures on China and Russia. Nvidia has criticized these guidelines as "unprecedented and misguided," arguing that they could hinder global innovation.

Beyond Nvidia, other AI companies have embraced Trump's "America-first" policy to gain favor with the administration. For instance, OpenAI, in collaboration with SoftBank and Oracle, launched the $500 billion Stargate Project in January to build U.S. data centers. Similarly, Microsoft committed $80 billion for AI data center development in its 2025 fiscal year, with half of the funds designated for the U.S.

Trump's approach has also involved applying pressure on international partners. He reportedly threatened the Taiwanese semiconductor company TSMC with a tax increase of up to 100% if it did not establish new chip manufacturing facilities in the U.S.