President Trump announced last week that he would allow China to buy an advanced artificial intelligence chip, the H200, from the American company Nvidia, doubling down on a misguided decision he made over the summer to sell China another advanced chip, the H20. The H200 is about six times as powerful and will be an even greater boon to China’s military and A.I. development.
Mr. Trump explained that in return, the U.S. government will charge a 25 percent fee on all sales of the H200. But U.S. national security and technological dominance shouldn’t ever have a price — let alone such a low one.
For years, both the Trump and Biden administrations had successfully sought as large a lead as possible over China in A.I. In 2018, the first Trump administration wisely cut off key companies in China from the most advanced chip-making equipment. In 2020, Mr. Trump helped reverse the deployment of nonsecure Chinese 5G telecommunications networks by Britain and other allies by banning the sale of advanced chips to the Chinese tech giant Huawei. The Biden administration substantially expanded those controls and added new ones. Both administrations said that China would use American-made chips to develop more sophisticated A.I. and modernize its military.
Hampered by those policies, China has struggled to make advanced A.I. chips, despite a push of around $200 billion starting in 2014. None of China’s chips are close to matching the capacity of the H200. Huawei, a leading Chinese chipmaker, projects that it will not be able to match the H200’s performance until the end of 2027 at the earliest — and even that estimate sounds optimistic.
In addition to making less capable chips, China struggles to make them in large quantities. Trump administration officials testified in June that China will make just 200,000 chips per year — not even enough for a single data center. By contrast, Taiwan, the United States and the rest of the democratic world will produce more than 10 million far-superior chips per year. All told, China will produce a total computing power that is a mere 1 percent to 3 percent of what U.S. companies will produce.
The chief executive of DeepSeek, a prominent A.I. company in China, admitted in 2024 that access to chips was the company’s biggest impediment. In the summer of 2025, DeepSeek reportedly tried and failed to train a new system on Chinese chips. When DeepSeek released its latest model several weeks ago, it acknowledged that the system still lags behind U.S. versions and cited computing limitations as the key reason.
After Mr. Trump’s announcement last week, Chinese companies jumped at the chance to buy the H200 — more evidence that America’s chip advantage is real.
The Trump administration argues that selling chips to China will keep China “addicted” to American products and undermine its efforts to improve production. But China knows better. In the days since Mr. Trump announced his decision to sell the H200, there have been reports that China will invest an additional $70 billion to improve its domestic production of chips. According to a report on Sunday in the Global Times, which is controlled by China’s ruling party, Nvidia’s advanced chips would be used only until Chinese tech companies can transition to domestic alternatives.
It’s all part of the same pattern, whether the product is solar panels, electric vehicles or telecommunications: China imports Western technology until its own production catches up; then it cuts out American companies. President Xi Jinping has long said that relying on others for core technology “is like building a house on someone else’s foundation.”
It should be obvious that the United States should not sell China advanced technology that China could use to target American troops and intelligence officers. Advanced A.I. will improve China’s cyber operations, intelligence analysis and weaponry. According to reports, the Trump White House has concluded that Alibaba, one of China’s biggest A.I. companies, provides technology support for the Chinese military, including some of its operations against U.S. targets. (Alibaba has denied this claim.) Other reports suggest that DeepSeek evades U.S. export controls and aids Chinese military and intelligence operations. Chinese procurement documents show that the People’s Liberation Army is also trying to get its hands on advanced U.S. chips.
The bipartisan House committee on China was right when it said last week that China will use the H200 to “strengthen its military capabilities and totalitarian surveillance,” and when it recommended tightening export controls rather than loosening them.
The Trump administration is well aware of how much A.I. matters to national security, which makes its decision even more baffling. Pete Hegseth, the defense secretary, last week proclaimed, “The future of American warfare is here, and it’s spelled ‘A.I.’” And when the Department of Justice recently announced charges against two individuals accused of smuggling H200s to China, it underscored the national security issues: “These chips are the building blocks of A.I. superiority and are integral to modern military applications. The country that controls these chips will control A.I. technology; the country that controls A.I. technology will control the future.”
For now, that country is the United States. In 2017, Li Keqiang, China’s premier at the time, told Mr. Trump during a meeting in Beijing that China would come to dominate all technologies, including A.I., and that America would export little more than soybeans and corn. Last week’s decision helps make that unlikely dream a reality.
Ben Buchanan is an assistant professor at the Johns Hopkins University School of Advanced International Studies and an adviser to A.I. and cybersecurity companies. Matt Pottinger is a distinguished visiting fellow at the Hoover Institution and the chief executive of Garnaut Global, a geopolitical research company.
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