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The Trump administration has walked back plans to block Nvidia's (NVDA, Financials) H20 artificial intelligence chips from being shipped to China, after a private dinner between CEO Jensen Huang and President Donald Trump at Mar-a-Lago, according to National Public Radio.Nvidia's H20 chip was days away from being hit with new export restrictions. The chip, custom-built for the Chinese market under existing U.S. rules, had raised concerns in Washington about advanced technology flowing to China's AI sector.
But following last week's meeting in Florida, the mood shifted. Huang reportedly pledged new investments in U.S.-based AI infrastructure, including data centers. That promise appears to have softened the administration's stance.
The proposed crackdown had been in the works for months. Both the Trump and Biden administrations had considered curbing exports of AI chips to China, citing national security risks. In January, lawmakers from both parties pushed for tighter controls.
Despite the pressure, demand for the H20 has only grown. Chinese AI startup DeepSeek, known for its budget-friendly models, has driven strong interest. Big names like ByteDance, Alibaba Group (BABA, Financials), and Tencent reportedly ordered over $16 billion worth of the chips in just the first quarter of 2025, according to The Information.
Neither the White House nor Nvidia has commented publicly on the shift. But the decision points to a familiar trade-off: securing national tech advantages while keeping U.S. companies competitive at home.
This article first appeared on GuruFocus.