The United States will allow chip giant Nvidia to export advanced artificial intelligence chips to China, US President Donald Trump said on Monday, after reaching an agreement with Chinese President Xi Jinping.

Nvidia is currently the largest US company by market value, having quickly risen with the AI wave.

How did Trump explain his decision on Nvidia chips for China?

The announcement marks a notable shift in US' tech export policy, especially for advanced AI chips.

Former US President Joe Biden's government had heavily restricted the sale of advanced chips to China over concerns they could be used by the Chinese military.

Trump made the announcement in a post on Truth Social, saying he had informed Xi that Washington would permit Nvidia to export its H200 products to "approved customers" in China and other countries, "under conditions that allow for continued strong National Security."

"President Xi responded positively! 25% will be paid to the United States of America," he wrote, adding that the move would benefit US taxpayers, increase jobs and strengthen US manufacturing.

A White House spokesperson clarified that the 25% fee would be an import tax from Taiwan where the chips are made. They will be imported to the US for a security review before being exported to China. 

China Nvidia deal omits most advanced chips

The US president assured that the nation would maintain its lead in AI as US customers were already moving to the highly advanced Blackwell chips, followed by the next generation Rubin chips, "neither of which are part of this deal."

"Offering H200 to approved customers, vetted by the Department of Commerce, strikes a thoughtful balance that is great for America," Nvidia said in a statement. Its Chief Executive Officer Jensen Huang has long lobbied the White House to reverse the Biden-era policy of restricting China's access to powerful chips. 

Trump said the Department of Commerce was finalizing the details but the "same approach will apply to AMD, Intel, and other GREAT American Companies." 

Democrats sound alarm bells

Several Democrats in the US Senate reacted to the deal by issuing a statement, "calling it a colossal economic and national security failure."

"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," the lawmakers said.

The senators cited a recent statement by Chinese AI company DeepSeek, which said the lack of access to advanced US-designed chips was their biggest challenge in competing with American AI companies like OpenAI, Google, Microsoft and Perplexity.

Meanwhile, Washington-based Institute for Progress' Alex Stapp, called the policy a "massive own goal," in a football reference. He said the H200 was "6x more powerful than the H20, which was previously the most powerful chip approved for export."

The deal's announcement comes days after Massacheusetts Senator Elizabeth Warren, a Democrat, alluded to a backroom arrangement between Trump and Huang which involved a donation to build the East Wing Ballroom at the White House.

"I'm asking Microsoft, Nvidia, Meta, Apple, Amazon, Union Pacific, and Comcast about their donations to Trump's 'Big Gold Ballroom'," she said in a post on X.

Will China make use of US chips?

China does not currently allow its companies to use US technologies, making it unclear if Trump's announcement will prompt a policy change in Beijing.

"Chinese firms want H200s, but the Chinese state is driven by paranoia and pride — paranoia about backdoors and dependence on US chips, and pride in pushing domestic alternatives," said Craig Singleton, a senior fellow at the Washington think tank Foundation for Defense of Democracies.

"Washington may approve the chips, but Beijing still has to let them in," he added.

Edited by: Dmytro Hubenko