USA: Trump administration officials are considering tighter curbs on Nvidia chips sold to China, according to sources familiar with the matter. However, they noted that these talks are in the early stages, with officials still working through their policy priorities, Bloomberg reported.
Sources said officials are considering expanding restrictions to include Nvidia’s H20 chips, which are used for developing and running AI software and services and are a scaled-down product designed to meet existing US export limits to China.
Sources also said that any decision on new restrictions is likely far off, as the Trump administration is still filling key roles in relevant departments.
During a confirmation hearing on Jan 29, Commerce Secretary nominee Howard Lutnick stated he would take a “very strong” stance on semiconductor controls but did not share further details.
According to Bloomberg, the White House did not immediately comment, while an Nvidia spokesperson said the company “is ready to work with the administration as it pursues its own approach to AI”.
Expanding restrictions on Nvidia would heighten tensions between the US and China as the US grapples with evidence of China’s rapid AI advancements.
Nvidia, already restricted in its China sales since 2022, warned that stricter rules could hurt its revenues in the key semiconductor market and push China to reduce reliance on US technology. Tough new rules would weaken US businesses, undermining the goals of the trade measures, Nvidia added.
The company noted that the Biden administration’s thresholds were based on performance levels from five years ago.
The H20 chip was developed in response to earlier restrictions, which initially required Nvidia to obtain licences for exporting its top AI chips. The company created less powerful variants, like the H800, but tighter limits introduced in 2023 prompted Nvidia to release the further scaled-down H20.
Discussions about restricting H20 chips have been ongoing in Washington, with Biden administration staff previously recommending the move, though it was not implemented before they left office.
Nvidia chips are facing increased scrutiny after Chinese startup DeepSeek claimed its new AI model rivals offerings from OpenAI, Google, and Meta, at a fraction of the cost using older Nvidia chips.
This potential challenge to the US firms’ dominance led to a sharp drop in tech stocks, wiping nearly US$1 trillion (S$1.35 trillion) off the market value of companies like Microsoft, Nvidia, Oracle, and Google.
Sources said Microsoft and OpenAI are investigating whether a group linked to DeepSeek had unauthorised access to OpenAI’s technology data output. /TISG
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