Top Democrats warn Trump over AI chip sales to China

Six Senate Democrats are urging President Donald Trump to reverse a plan that would let Nvidia and AMD sell advanced AI chips to China in exchange for a 15% cut of revenue to the U.S. government. In an open letter following Trump’s August 11 announcement, Senators Chuck Schumer, Mark Warner, Jack Reed, Jeanne Shaheen, Christopher Coons, and Elizabeth Warren argued the arrangement undermines national security by giving a strategic rival access to sensitive technology.  They warned that shipments of Nvidia’s H20 and AMD’s MI308 chips could strengthen China’s military systems, a claim Nvidia disputes. The company told CNBC that the H20 would not enhance anyone’s military capabilities and said banning the chip cost U.S. taxpayers billions without benefit. AMD did not immediately comment.  The senators asked the administration to provide details by Friday, August 22, on the Nvidia and AMD deal and disclose any similar agreements with other firms. “Negotiating away America’s competitive edge” for a commission on AI-enabling tech, they wrote, is cause for serious concern.  The White House dismissed the criticism, with spokesman Kush Desai saying Democrats and outside experts ignored earlier flows of advanced technology to China and are now “pretending to care” about security. Even with the policy shift, Nvidia may struggle to regain Chinese customers. Bloomberg reported Chinese authorities are urging local tech companies to avoid U.S.-made chips, and some orders of H20s are being halted.  The Information said regulators have instructed major firms, including ByteDance, Alibaba, and Tencent, to pause Nvidia chip purchases while a national security review is conducted. The letter highlights a growing clash between economic aims and security controls as Washington weighs how far to restrict cutting-edge semiconductors.  The senators want the administration to abandon the plan; the White House appears unmoved. China, meanwhile, is signaling it will limit reliance on U.S. suppliers regardless of Washington’s decision.