U.S. Approves Nvidia AI Chip Sales to Chinese Firms With Ties to Blacklisted Entities

The United States government is allowing Nvidia to sell advanced artificial intelligence chips to Chinese businesses that have connections to companies on a trade blacklist.

Concerns are growing that neither the Commerce Department nor Nvidia is properly vetting the Chinese firms approved to receive the powerful H200 processors. A report by *The New York Times* found that one approved company, New Matrix, operates out of an empty office described as a hollow gray shell with loose wires hanging from the ceiling. Online records for the 17-month-old company are sparse, and staff at the industrial park property management agency stated they have no record of the firm.

New Matrix has owners with ties to a Chinese private equity firm that the U.S. government blacklisted in 2024. According to reporting by *The New York Times*, this instance is part of a broader pattern rather than a single oversight. Multiple companies with links to entities facing national-security trade restrictions have received clearance to purchase the hardware.

These export approvals follow a shift in federal policy. The Biden administration previously blocked Nvidia from selling its advanced chips to China, but the Trump administration lifted those restrictions. President Donald Trump announced that Nvidia received White House approval to export H200 AI graphics processing units to approved customers in China and other countries.

The updated policy requires Nvidia to give the U.S. government a 25 percent cut of the sales, an increase from the 15 percent cut required under previous terms. President Trump stated that the policy will support American jobs, strengthen domestic manufacturing, and benefit taxpayers. The agreement follows an intense lobbying campaign by Nvidia CEO Jensen Huang. Reports indicate Huang was also targeted by China’s Ministry of State Security in a spying plot.

The H200 chips serve as an upgrade over the scaled-down H20 chips Nvidia was previously allowed to sell in China, though they remain less powerful than the company's newest Blackwell graphics processors. While the administration lifted the export caps, a group of senators urged the President to block China's access to the most powerful chips to maintain the United States' leading position in artificial intelligence. However, the success of the new sales depends on whether Chinese companies are willing to buy the hardware, as Beijing has barred domestic firms from purchasing foreign chips to support its own local manufacturing industry.

Summary

The U.S. government has relaxed export limits on advanced AI chips to allow sales to approved Chinese customers under a revenue-sharing agreement. Investigations into companies like New Matrix raise questions about the thoroughness of government vetting and whether trade restrictions are successfully preventing restricted entities from acquiring sensitive technology.