Top Senate Democrats wrote an open letter asking President Donald Trump to rethink his decision to allow artificial intelligence chip sales to China. The deal allows chip giants Nvidia and AMD to sell advanced AI chips to China in exchange for a 15% cut of revenue from the sales.

But now, as National Security Adviser Jake Sullivan declared that September, “we must maintain as large of a lead as possible.” On October 7, 2022, the Biden administration announced a sweeping set of export controls designed to cut off China from the most advanced chips used for training powerful AI models,

The attack, dubbed “Salt Typhoon,” constituted a large part of a global campaign against telecoms, and it penetrated systems at many U.S. carriers so thoroughly that officials will almost certainly never know the full scope of the capabilities China achieved to spy on Americans’ communications.

Chinese advances in AI have come one after another this year, starting with the widely heralded DeepSeek and its R1 reasoning model in January. This was followed by Alibaba’s Qwen and a flurry of others since July, with names such as Moonshot, Z.ai and MiniMax.

Nvidia struck a surprising deal after convincing the president that H20 chips aren’t a national security risk. But whether the reversal is good or bad depends on who you ask.

AI technologies have “broken through the critical threshold of usefulness”, says one early-stage investor who frequents Liangzhu. He predicts a surge in how AI can be applied. “Once the water boils,” he says,

Trump said on Monday that he might allow Nvidia to sell a more advanced artificial intelligence chip in China based on the chipmaker’s latest and most advanced Blackwell platform. The performance of H20 chips sold to China is restricted compared with those more advanced processors sold to customers in the US.

But that’s not the full story. While engineering degrees are critical, they don’t guarantee technological leadership. What really drives innovation is not how many people you train, but how you train them. And here, China faces a deeper, cultural problem that raw output can’t solve.

Upper chamber lawmakers want answers from the Trump administration on the 15% fee Trump said NVIDIA and AMD must pay to be able to sell their more advanced products to a major U.S. adversary.

Trump said Monday that he has cut a deal with chipmaker Nvidia, allowing it to sell certain artificial intelligence chips to China in exchange for a cut of the revenue, which would go to the U.S. government. Trump said he also negotiated a similar deal with chipmaker Advanced Micro Devices (AMD).

President Donald Trump used a national security law to squeeze some money out of a U.S. company. This is standard fare for our quid pro quo president.