President Donald Trump’s decision to let U.S. tech giant Nvidia sell more advanced semiconductors to China is getting pushback from some Republicans wary of giving Beijing an edge in the global race to AI dominance.
The agreement, which Trump announced in a Truth Social post Monday evening, would allow Nvidia to sell its H200 artificial intelligence chips to China on the condition that the U.S. government gets 25% of the sales.
The H200 chips aren’t Nvidia’s most advanced, but are more powerful than the company’s H20s, which were previously developed specifically for the China market.
The White House, over the summer, gave approval for Nvidia and Advanced Micro Devices to sell their less-powerful chips to China in exchange for 15% of sales revenue. Beijing reportedly told companies not to buy those chips.
Chinese President Xi Jinping “responded positively” to the latest proposal, Trump wrote in the social media post.
CNBC has reached out to the Chinese Embassy in Washington, D.C., for comment.
Experts warn that giving China access to the better chips will shrink America’s hardware advantage and help Chinese developers vastly improve their AI models and other tech.
Some of Trump’s Republican allies appear to agree.
“Alarm bells go off in my head here,” Sen. Lindsey Graham, R-S.C., told CNBC on Tuesday when asked about the chip sales agreement.
“I don’t mind doing normal business with China. But if you can prove to me this will accelerate their military capability, I’ll oppose it,” Graham said.
“My general view on this is that China’s progress on AI is almost entirely parasitic on our technology, in particular on our hardware,” Sen. Josh Hawley, R-Mo., said on Capitol Hill earlier Tuesday.
“So I don’t want China to win the AI race. I want to win the AI race,” Hawley said. “But if we want to beat China, I think we need to constrain their ability to leverage our own technology, and I think we would want to reduce their access to our hardware, not increase it.”
Hawley did not directly criticize Trump, and noted that the president is privy to more information about the situation than he is. “So I think he deserves some deference here,” Hawley said.
“But I think in the general matter I would want to constrain American hardware going to China,” he added.
Sen. John Cornyn, R-Texas, asked about the chip agreement, was more succinct.
“I’m concerned,” he said. Cornyn did not respond to follow-up questions.
The U.S. House Select Committee on China, a Republican-led panel formed to focus on the “threat posed by the Chinese Communist Party,” echoed Hawley’s concerns.
“Right now, China is far behind the United States in chips that power the AI race. Because the H200s are far better than what China can produce domestically, both in capability and scale, @nvidia selling these chips to China could help it catch up to America in total compute,” the committee said in a statement on X.
Beijing will use the H200s, which boast significantly more processing power and memory bandwidth than China’s top chips, “to strengthen its military capabilities and totalitarian surveillance,” the panel’s statement said.
“Finally, Nvidia should be under no illusions – China will rip off its technology, mass produce it themselves, and seek to end Nvidia as a competitor,” the panel said. “That is China’s playbook and it is using it in every critical industry.”
Asked for comment on the GOP lawmakers’ remarks, White House spokesman Kush Desai told CNBC, “The Trump administration is committed to ensuring the dominance of the American tech stack – without compromising on national security.”
Not all Republicans are piling on.
“I don’t have a real problem with providing them some [chips],” Sen. Thom Tillis, R-N.C., told CNBC. “But we’ve got to know where it is, how they’re using it, those sorts of things.”
But there is vocal support among both parties for slowing China’s ability to obtain the world’s best chips.
Sen. Pete Ricketts, R-Neb., last week introduced bipartisan legislation that would direct the Trump administration to deny export licenses for advanced chips to China and other foreign adversaries for at least 30 months.
“The best AI chips are made by American companies. Denying Beijing access to these AI chips is essential to our national security,” Ricketts said in a press release unveiling the bill.
Sen. Tom Cotton, R-Ark., one of the bill’s co-sponsors, said, “It’s crucial that we protect American AI innovation from Communist China to win the AI race.”
Democrats have been sounding alarms about the Trump administration’s willingness to sell China better AI chips.
Senate Intelligence Committee Vice Chairman Mark Warner, D-Va., slammed the Trump administration’s “haphazard and transactional approach to export policy,” saying it “risks squandering U.S. AI leadership and deferring to the People’s Republic of China up and down the AI stack.”
Sen. Elizabeth Warren, D-Mass., highlighted the fact that the Department of Justice touted a crackdown on a “major China-linked AI tech smuggling network” shortly before Trump announced the H200 sales agreement.
“Trump is letting NVIDIA export cutting-edge AI chips that his own DOJ revealed are being illegally smuggled into China,” she wrote on X.
“His own DOJ called these chips ‘building blocks of AI superiority,'” she noted.
Warren added that she wants Trump and Commerce Secretary Howard Lutnick to “answer to Congress on why they are selling out US security.”
— CNBC’s Mary Catherine Wellons and Justin Papp contributed to this report.