Trump approves Nvidia chip for sale in China Beijing doesn’t want that.

When President Trump announced late last year that Nvidia might sell one of its most powerful chips to China, the deal looked like a rare win in shaky geopolitical relations. It would provide a major boost to China’s AI ambitions, while delivering a win for the top US chipmaker.

High-end AI systems run on staggering amounts of computing power, and Nvidia’s chips are considered the gold standard worldwide. Chinese competitors have yet to build anything to rival Nvidia’s best, and Mr Trump’s decision undermined years of US policy to keep the chips out of China’s reach.

Former Biden and Trump administration officials have warned that the move could squander the lead American AI companies have held over Chinese rivals by helping China close the gap until its own chipmakers catch up with Nvidia.

But six months after that, Beijing wouldn’t let any of its companies buy a single one.

The impasse reveals the depth of mistrust between the world’s technological superpowers. For decades, American and Chinese companies have worked side by side to create products like the iPhone that have upended industries. However, the relationship has soured over the past decade as both governments have come to see technology as a fulcrum of economic dominance.

Nvidia is stuck in the middle. The chip maker has become the world’s most valuable company by making its semiconductors indispensable to the operation of AI systems. But Washington and Beijing increasingly see the technology as a matter of national security, especially after watching it being used to coordinate attacks in Gaza, Ukraine, Venezuela and Iran.

Rather than turn to Nvidia, Chinese officials pushed domestic companies to domestic alternatives from chipmakers such as Huawei and Cambricon. After meeting last week in Beijing with Chinese leader Xi Jinping, Mr Trump said China’s lack of interest in the chip he endorsed, known as the H200, was partly due to this push for industrial self-sufficiency.

“They chose not to. They want to try to develop their own,” he said.

Chinese AI companies are hungry for more computing power. Kevin Xu, founder of Interconnected Capital, a hedge fund that invests in artificial intelligence technologies, recently spent nine days in China meeting with leading AI startups. Each, he said, pointed to a lack of computing power as the biggest factor holding them back.

However, Chinese companies are now starting to build their AI systems around these restrictions rather than waiting for them to ease. And Beijing wants them to continue doing exactly that.

“It’s a balancing act,” Mr. Xu said. The government knows its companies need more computing power, but it also wants to push domestic chipmakers to be better and faster.

Jensen Huang, an Nvidia executive who traveled to Beijing last week as part of Trump’s delegation, said he did not hand over the H200 chip to Chinese officials. But he remains optimistic that the market will eventually open up, given China’s huge appetite for AI chips.

“The Chinese government has to make a decision — how much of its local market it wants to protect and what part of its local market it wants to expand with more AI capacity,” Mr. Huang said on Bloomberg TV on Monday. “I feel like over time the market will open up.”

In March, Mr. Xi unveiled an ambitious plan to deepen China’s decade-long drive to rely on its own technology. Over the next five years, he wants the nation to pursue breakthroughs in areas such as artificial intelligence, quantum computing and fusion energy.

The pursuit of self-sufficiency is becoming more attainable as domestic chipmakers rapidly improve their offerings. Huawei, the Chinese tech giant, and start-up Cambricon and others are now making chips that have the same performance as the H200.

DeepSeek, the start-up that has become a symbol of China’s growing AI capabilities, has also become a sign of the country’s shift away from Nvidia.

When it released its latest AI model last month, the company said for the first time that its new system had been optimized to run on chips made by Chinese tech giant Huawei — a small but significant milestone in China’s long-running push to develop advanced technology at home.

Although Washington and Beijing have effectively blocked Nvidia’s most advanced products from the world’s largest chip market, the restrictions have done little to slow the chipmaker’s business. On Wednesday, Nvidia reported a quarterly profit of $58.3 billion. The company said it has not seen any sales of its signature AI chips in China and doesn’t expect that to change anytime soon.

While Chinese tech companies now use home-grown chips for some tasks, they still rely on Nvidia chips for training, the difficult process of teaching an AI model how to operate. Part of the reason is that Chinese chipmakers are struggling to produce advanced chips in volumes sufficient to meet demand.

Many Chinese AI companies use workarounds to avoid buying their own Nvidia chips. They lease remote access to chips located in data centers operated by other companies, often outside the republic. When two artificial intelligence start-ups, MiniMax and Zhipu AI, went public in Hong Kong earlier this year, their disclosures showed the companies spending several times their revenue to train their models using “cloud services”.

But there are drawbacks to this approach, said Jiang Tianjiao, an associate professor at Fudan University in Shanghai. This means slower processing times and a higher risk of data leakage. This makes Chinese companies dependent on third-party data center operators who can cut them off at any time. It also faces the risk that the United States could pass regulations that would completely shut down remote access to Nvidia’s chips, a move that some officials in Washington have pushed for.

Still, overall, Chinese companies spend far less on AI than their American competitors. It is expected to spend $123 billion on AI chips and data centers this year, according to Bernstein Research. By contrast, US tech companies are expected to spend roughly $1 trillion.

Lower spending reflects both ambition and means. Chinese companies have been slower to bet their future on artificial intelligence than their American counterparts, and have less revenue for it. That restriction could ease pressure on Beijing to clear the way for Nvidia purchases, said Chris McGuire, a senior fellow at the Council on Foreign Relations who worked on chip export controls under President Joseph R. Biden, Jr.

Beijing may also be wary of allowing Nvidia purchases on national security grounds. Last July, the Internet regulator, the Cyberspace Administration of China, summoned Nvidia to explain the security risks associated with chips it developed for the Chinese market.

Nvidia said its products do not contain any backdoors that would allow anyone to gain remote access. But Chinese suspicions have made it difficult to resume sales.

Mr. Huang has not given up on China. After a last-minute invite to last week’s summit, he spent time in Beijing posing for photos with people on the street and sipping noodles on the sidewalk, part of an effort to keep ties alive in the hope that Nvidia will one day return.

Its shuttle between Washington and Beijing underscores the value it places on the Chinese market and the profits Nvidia could reap there, said Wendy Chang, senior analyst at the Mercator Institute for China Studies think tank. But that eagerness, she said, may encourage Beijing to hold out for more concessions.

At Washington’s request, Nvidia withheld its most powerful chips from China and limited sales to the United States and its allies. This chip, which Nvidia calls Blackwell, outperforms anything currently available on the Chinese market.

“By playing hardball to get in, Beijing can hope for greater leverage in accessing better chips,” Ms. Chang said.

Xinyun Wu contributed reporting from Taipei.