The U.S.–China technology rivalry has taken a fresh turn after President Donald Trump hinted he may allow Nvidia to sell a scaled-down version of its next-generation Blackwell AI chips to Chinese buyers. The move could significantly impact the global AI race, raising questions about national security, innovation, and the balance of power in advanced computing.
Background: The Blackwell Advantage
Nvidia unveiled its Blackwell platform in early 2024, claiming up to 30x faster performance than its predecessor. These chips are central to powering advanced AI models and supercomputing systems. However, U.S. export restrictions have kept the most advanced versions out of China, citing risks of the technology being used for military purposes.
Currently, the most powerful chip Nvidia can legally sell in China is the H20, based on the older Hopper architecture. The proposed “scaled-down” Blackwell chips would reportedly operate at 30% to 50% reduced computing power compared to the U.S. flagship model.
Trump’s Statement and Policy Context
Speaking to reporters, Trump mentioned discussions with Nvidia CEO Jensen Huang about an “unenhanced” Blackwell chip. The administration also confirmed a deal with Nvidia and AMD in which the U.S. government would receive 15% of revenue from sales of certain advanced chips to China.
The proposal has divided policymakers. Supporters see it as a potential economic opportunity, while critics view it as a strategic risk in the ongoing U.S.–China AI arms race.
National Security Concerns
Saif Khan, former director of Technology and National Security at the White House National Security Council under President Biden, warned that even reduced-capacity chips could allow China to build frontier-scale AI supercomputers. This, he argued, could enable China to leapfrog U.S. capabilities in AI, undermining American technological leadership.
China’s Foreign Ministry has not issued an official response to Trump’s comments.
Economic and Strategic Implications
The potential sale of scaled-down Blackwell chips could:
- Boost U.S. chipmaker revenues in a high-demand market.
- Give China access to more powerful AI infrastructure than current export rules allow.
- Intensify competition in global AI development.
However, it also risks narrowing the technology gap that the U.S. has tried to maintain through export controls.
The Bigger Picture: AI, Semiconductors, and Geopolitics
This development comes amid heightened tensions over semiconductor supply chains and AI dominance. The semiconductor industry is now seen as a strategic asset, with nations racing to secure cutting-edge chips for economic and military advantage.
Industry analysts suggest that while scaled-down chips may seem like a compromise, large-scale purchases by China could still provide enough aggregate computing power to push forward AI innovation.
Conclusion
Trump’s openness to selling a reduced-capacity version of the Nvidia Blackwell AI chip to China highlights the complex trade-off between economic opportunity and national security. For U.S. policymakers, the challenge remains finding the balance between protecting technological leadership and leveraging global markets, a balance that will define the future of the AI race.
