NVIDIA, which had previously announced its de facto withdrawal from the Chinese market, has unexpectedly changed its position and applied to resume sales of its H20 AI chip to China.
Reuters reports, citing US Commerce Secretary Howard Latnick, that the decision is related to negotiations between the US and China over trade in rare earth elements (REE), which are critical for modern technologies, including electric vehicle batteries. China is a major supplier of such elements.
In addition to NVIDIA, AMD also has similar plans - the company wants to resume sales of its MI308 AI chip on the Chinese market.
However, such a relaxation has drawn criticism from American politicians. Congressman Raja Krishnamoorthi called the decision controversial and one that gives competitors access to advanced US technology. He also said that it undermines the administration's previously stated position on export controls to China.
Minister Latnik, however, assured that China would only receive the "fourth most powerful" NVIDIA chip, not the top models.
Meanwhile, the U.S. government has yet to formulate new export control rules for AI chips. The Trump administration in May rolled back the Biden-era rules and has yet to propose an alternative. It is also considering restricting exports to Southeast Asian countries to prevent smuggling.