U.S. Tightens AI Chip Export Rules Ahead of Trump-Xi Summit

The U.S. administration is reviewing an export licensing system for artificial intelligence semiconductors ahead of President Donald Trump's planned visit to China from March 31 to April 2. This follows military operations in Venezuela and Iran, signaling a comprehensive pressure campaign against Chinese President Xi Jinping using security, energy, and technology measures.

Bloomberg reported on March 3 that the U.S. government is considering limiting Nvidia's H200 AI chip exports to China to 75,000 units per company—less than half of what major Chinese AI firms including Alibaba and ByteDance had ordered. AMD's MI325 chips with similar performance would face identical restrictions.

Trump had announced in December on Truth Social that he would allow Nvidia's H200 exports to China, following the U.S.-China summit during the APEC leaders' meeting in Gyeongju, South Korea. The decision also reflected persistent lobbying by Nvidia CEO Jensen Huang, who was seeking new revenue streams.

However, bipartisan concerns emerged in Washington about China potentially using Nvidia chips for military purposes. The H200 significantly outperforms the previously approved H20 chip but falls below Nvidia's cutting-edge Blackwell and Rubin processors.

Commerce Secretary Howard Lutnick told a Senate appropriations subcommittee hearing on February 10 that Nvidia must accept conditions including strict Know Your Customer (KYC) procedures to prevent Chinese military access. The Bureau of Industry and Security also imposed a $252 million fine on Applied Materials and its Korean subsidiary for exporting semiconductor equipment to China.

A pivotal shift came on February 20 when the U.S. Supreme Court invalidated reciprocal tariffs and fentanyl tariffs imposed under the International Emergency Economic Powers Act. This effectively nullified the previous U.S.-China trade agreement, under which the U.S. had cut tariffs by 10 percentage points and approved H200 exports in exchange for China's fentanyl control measures.

According to Reuters on March 5, the Commerce Department is now considering requiring foreign companies importing U.S. AI chips to invest domestically and provide security guarantees. Export licenses would be required even for installations of fewer than 1,000 chips.

The Financial Times reported that Nvidia has halted H200 production for Chinese exports, shifting TSMC capacity to next-generation Vera Rubin chips. China's customs authorities had also refused to allow H200 imports as leverage ahead of Trump's China visit.

Nvidia's CFO Colette Kress acknowledged during the company's fourth-quarter earnings call on February 25 that despite receiving U.S. government approval for limited H200 sales to Chinese customers, no revenue had materialized. The company holds 250,000 H200 chips in inventory.

South Korea may face similar restrictions. Jensen Huang had promised 260,000 Blackwell chips to Korean customers, but these could be affected by the new export licensing regime. The upcoming U.S.-China summit is also expected to address U.S. crude oil imports, potentially reshaping both Middle East geopolitics and the global AI industry landscape.