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The Trump administration must balance national security concerns with promises to keep US companies dominant in global markets.
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US President Donald Trump is considering tighter restrictions on Nvidia’s sale of AI chips to China following the recent repercussions caused by the release of DeepSeek’s R1 model.
According to a Bloomberg report citing unnamed sources, the administration is mulling a potential ban on the export of Nvidia’s H20 AI processor to the South Pacific country.
Nvidia’s H20 chip is a slower version of Nvidia’s H100 processor created for the Chinese market in compliance with existing US sanctions and regulations.
If the Trump administration follows through on tighter export restrictions of high-performance computing chips and semiconductors to China, it would mark the fourth time since 2022 that the US government has imposed such controls.
Tighter restrictions could also mean slimmer profits for Nvidia and may erode the United States’ global market share in the AI sector.
Nvidia’s stock price took a hit following the release of DeepSeek’s R1 model. Source: TradingView
Related: Release of DeepSeek R1 shatters long-held assumptions about AI
Previous US export controls on China backfire
Following the ban on the sale of Nvidia H100 processors to China in October 2022, China turned to domestic firms to research and develop AI using weaker semiconductors and combinations of AI chips.
The goal of the research was to bypass reliance on a single source of AI chips and minimize supply chain risk.
In June 2023, the Biden administration announced plans to impose tighter restrictions on AI chip exports to China, which the US Department of Commerce’s Bureau of Industry and Security adopted in October 2023.
The 2023 restrictions were expanded to include modified AI processing chips, which were compliant before the 2023 update, and semiconductor hardware.
Despite the tighter controls, state-affiliated Chinese entities managed to bypass US sanctions by accessing banned AI hardware through cloud computing platforms such as Amazon Web Services.
Chinese state-affiliated firms used shell entities or middlemen to indirectly access the cloud computing power rather than through Amazon Web Services.
Critics of the export controls say they reduce the competitiveness of US firms in the name of national security and that the controls are ineffective at preventing other nations from accessing AI computing power.
Magazine: Cypherpunk AI: Guide to uncensored, unbiased, anonymous AI in 2025
This article first appeared at Cointelegraph.com News
