US taking 25% cut of Nvidia chip sales “makes no sense,” experts say (arstechnica.com)

The recent decision by Donald Trump to allow Nvidia to export its advanced H200 AI chips to China has sparked concern among experts and lawmakers, who warn it could boost China's competitiveness in the AI race. While the H200 is significantly less powerful than Nvidia's top-tier Blackwell chip, it provides a crucial upgrade for China, outperforming the H20, which is currently its most advanced offering. Critics like Jake Sullivan, a former national security advisor, argue that this move undermines U.S. leverage in technology and could inadvertently help Chinese firms like Huawei catch up to Nvidia's cutting-edge capabilities. The decision has broad implications for the AI/ML landscape, with proponents inside Nvidia suggesting that increased sales to China could fund extensive research and development, potentially securing Nvidia’s leading position in the market. Analysts estimate that these sales could generate $10–15 billion annually for Nvidia, which may help sustain innovation in U.S. chip technology. However, the fear remains that by granting access to advanced American chips, the U.S. is not only empowering its rival in the AI sector but also eroding its competitive advantage at a critical moment in the global technology race.