US lawmakers call Trump’s China Nvidia chip decision a ‘colossal failure’ for national security

Seven Democratic senators are calling Trump’s approval of Nvidia’s H200 chip sales in China a major blow to U.S. security policy. They sent a letter to Commerce Secretary Howard Lutnick on Friday, warning that the move hands Beijing access to hardware they say Washington has spent years trying to restrict.

The senators argued that letting Nvidia sell its second-most advanced AI chip in China breaks from past efforts to limit the use of American tech in China’s military programs.

The letter came four days after Trump told China’s leader Xi Jinping that the U.S. would allow Nvidia to ship the H200 “under conditions that allow for strong national security.”

Nvidia agreed to give 25% of the revenue from China sales to the U.S. government. Senators said the White House made the decision at the exact moment federal prosecutors announced charges against smugglers who moved thousands of H200 chips into China.

Senators press Trump as export-control fight grows

Senators Elizabeth Warren, Elissa Slotkin, Chuck Schumer, Tim Kaine, Michael Bennet, Andy Kim, and Ron Wyden said the decision “gives away critical national security controls” and could boost China’s military programs.

They reminded Lutnick that Nvidia had been blocked from selling any advanced chips to China since April, when the administration tightened rules on high-end hardware. They also noted that Trump had approved a smaller deal in August for Nvidia’s H20 chip.

Nvidia agreed then to give the government 15% of sales, but the plan collapsed when China told buyers not to purchase the downgraded chip.

Nvidia’s chief executive Jensen Huang later pushed for approval to sell a weaker Blackwell model in China. Cabinet officials, including Secretary of State Marco Rubio and U.S. Trade Representative Jamieson Greer, warned that it created too much risk.

Trump said no. But the administration changed position this week and allowed H200 exports, even though the chip is almost six times stronger than the H20 China rejected months ago.

The senators wrote that the Justice Department’s new smuggling cases show how valuable the H200 is, since prosecutors described Nvidia’s chips as the “building blocks of AI superiority” and essential for “modern military applications.”

They said giving China legal access hurts U.S. startups, labs, and universities during a period when advanced chips remain scarce in America.

Agencies fire back as Nvidia defends its position

The Commerce Department dismissed the senators’ warnings. A spokesman said, “These same Democrats were silent when the last administration sold out our national security to the world,” and added that Lutnick supports strict rules on advanced technology.

The White House also weighed in. Spokesman Kush Desai said there is “an obvious difference between chips being illegally smuggled to unknown buyers without regulatory oversight and chips being exported following national security inspections to specifically designated end users.”

Nvidia defended the approval, saying that Trump’s decision “strikes a thoughtful balance that is great for America” and argued that China already accelerated its own chip development after the earlier U.S. ban.

Nvidia also said it is managing its “supply chain to ensure that licensed sales of the H200 to authorized customers in China will have no impact” on U.S. supply.

The senators also flagged what they called the “appearance of corruption and insider access,” pointing to Nvidia’s recent “charm offensive” in Washington. They noted Huang’s private meetings with Trump and Nvidia’s donation to the White House ballroom construction fund.

The letter marks the second Senate push in weeks aimed at blocking Nvidia’s plans to restart China sales. Nvidia has told investors that renewed access to the Chinese market could bring tens of billions of dollars in yearly revenue.

Last week, a bipartisan group led by Tom Cotton introduced the Safe Chips Act, which would force the Commerce Department to deny export licenses for 30 months for certain advanced chips going to China, Iran, North Korea, and Russia.

Sign up to Bybit and start trading with $30,050 in welcome gifts