The U.S. government has intensified its strategic blockade on advanced artificial intelligence chip exports to China, overriding industry appeals amid escalating national security fears over Beijing’s technological advancements. This assertive stance led to the last-minute halting of a deal for Nvidia’s cutting-edge Blackwell chips, valued at tens of billions of U.S. dollars.
The decision was made just hours before a scheduled summit between President Donald Trump and Chinese President Xi Jinping in Busan, South Korea. Nvidia’s Chief Executive, Jensen Huang, had urgently sought approval for the sales, emphasizing the critical importance of the Chinese market to global technological progress.
However, U.S. national security and trade advisors unanimously opposed the proposal. Secretary of State Marco Rubio warned that exporting Blackwell processors would significantly strengthen Chinese data centers and jeopardize American strategic interests. Trade Representative Jamieson Greer and Commerce Secretary Howard Lutnick also rejected the plan.
Facing widespread opposition, President Trump removed the chip export issue from his meeting agenda with President Xi. The Blackwell chips, Nvidia’s most advanced generation of Graphics Processing Units (GPUs), are essential for training and running sophisticated AI systems. Servers equipped with the B200 model can train AI systems three times faster and execute inferences up to fifteen times faster than previous generations.
The recent block builds on previous restrictions initiated in 2022, which aimed to slow China’s development of frontier AI. President Trump had previously indicated a willingness to approve a lower-performance version of the Blackwell chip. Yet, following his return from Asia, he adopted a more restrictive position.
In an interview, Trump stated he would allow China to conduct business with Nvidia, “but not with its most advanced chip.” This policy has created an “uncomfortable situation,” according to Huang, who noted that approximately half of the world’s AI researchers work in China.
Previous attempts to navigate export controls have proven difficult. In August, the White House temporarily lifted a ban on an older chip, conditioning approval on Nvidia sharing 15% of its revenue from China with the U.S. government. Legal experts criticized this as an unauthorized tax. Shortly thereafter, Beijing privately instructed local companies not to purchase the chip, costing Nvidia billions of U.S. dollars in lost sales for its H20 model.
Congressional criticism against Huang has also intensified. Lawmakers circulated a July CNN interview where the executive stated he did not believe it was relevant who won the global AI race. The House Select Committee on China called these comments “dangerously naive,” comparing the situation to the nuclear arms race of the Cold War.
Despite the Busan summit yielding agreements to ease some tensions, such as tariff reductions and renewed Chinese purchases of U.S. soybeans, the issue of advanced chips remains unresolved. Access to cutting-edge processors is crucial for President Xi’s plans to bolster China’s technology industry and achieve self-sufficiency.
Nvidia continues discussions with the U.S. government regarding a modified version of the Blackwell chip. Huang mentioned last week that Trump continues to call him “late at night,” and dialogue will proceed before the president’s next trip to China in April. Nevertheless, the high-end Blackwell chip remains blocked, leaving the future of advanced technology exports to China uncertain.