• The US is reviewing sales of Nvidia’s H200 AI chips to China.
• President Trump stated sales would help US firms maintain a competitive edge.
• Approval process involves multiple US agencies, each with national security concerns.
• Critics warn the chips could enhance China's military capabilities.
• This move marks a departure from previous Biden-era restrictions on chip sales.

The United States government has initiated a review that may allow the first shipments of Nvidia's H200 AI chips to China, fulfilling President Donald Trump's commitment to enable these controversial sales. Trump stated that this decision will involve a 25% government fee on the sales, asserting it would help maintain US competitiveness against Chinese chipmakers by reducing their market demand. However, concerns have been raised about the potential implications of these chips on national security, particularly regarding their capacity to enhance Beijing's military capabilities, according to Reuters and Channel News Asia.

The licensing process for the H200 chips involves a formal review by the US Commerce Department, which has sent applications for evaluation to the State, Energy, and Defense Departments. Each agency has 30 days to assess the applications. An administration official emphasized that this review would be thorough, contrary to claims of merely fulfilling procedural obligations. Ultimately, if disagreements arise between the agencies, the final decision will rest with Trump himself, as outlined in reports from Reuters and India Times.

This decision represents a significant shift from policies in place during the Biden administration, which had imposed extensive restrictions on advanced AI chip sales to China and other nations seen as potential conduits for technology transfer to Beijing. Former national security officials, including Chris McGuire, have criticized the proposed sales as a "significant strategic mistake," arguing that these chips are crucial for maintaining US superiority in AI technology. McGuire noted that allowing such exports could bolster China’s technological advancements and military capabilities significantly, according to Channel News Asia and India Times.