• The US government has begun a review of Nvidia's H200 AI chip sales to China.
• Sales could propel US firms forward while raising concerns over Beijing's military capabilities.
• Critics argue that granting chip export permissions undermines US national security.

The Trump administration has initiated a review process that may lead to the first shipments of Nvidia's H200 AI chips to China, in line with Trump's recent commitment to permit these controversial sales. The administration plans to impose a 25% fee on transactions, claiming that it would assist U.S. companies in maintaining a competitive edge by decreasing dependency on Chinese-developed chips, according to Reuters and Channel News Asia.

However, the move has met with backlash from U.S. political circles. Critics worry that enabling access to these chips could bolster Beijing's military capabilities and compromise America's lead in artificial intelligence technology. Questions arise regarding the approval timeline and whether Chinese authorities would permit local firms to acquire such technology, as reported by Reuters, Channel News Asia, and India Times.

The U.S. Commerce Department is overseeing the export policy and has forwarded licensing requests to the State, Energy, and Defense Departments, which have 30 days to provide feedback on the proposed sales. The final decision ultimately resides with Trump, who is under pressure from both sides of the political spectrum over the potential risks, as emphasized by sources from South China Morning Post and India Times.

Former national security officials warn that such exports could be "a significant strategic mistake," asserting that the H200 chips are instrumental in stalling China's AI advancements. Chris McGuire, a former White House National Security Council official, noted his skepticism about the U.S. government assessing these chips' export as beneficial to national security, according to Reuters, Channel News Asia, India Times, and South China Morning Post.

Proponents of the policy within the Trump administration argue that exporting advanced chips might impede Chinese firms, such as Huawei, from advancing their own technologies. Meanwhile, Nvidia is reportedly considering ramping up production of the H200 due to increased orders from China, reflecting high demand despite the ongoing uncertainties concerning the licensing process, as noted by Reuters, Channel News Asia, India Times, and South China Morning Post.