Criticism is mounting after US President Donald Trump announced Nvidia would be allowed to sell its H200 chips to China, with opponents saying it could severely cut into the US lead in artificial intelligence.
Democrats and Republicans in Washington expressed concern that the move might lead the US to lose what is considered to be a competitive advantage in semiconductors and AI to its rival, China.
In a post on X, the House of Representatives select committee on the Chinese Communist Party issued a warning to Nvidia chief executive Jensen Huang, who last week visited in Washington to lobby for support on sales.
"Nvidia should be under no illusions – China will rip off its technology, mass-produce it themselves and seek to end Nvidia as a competitor," the post read. "That is China’s playbook and it is using it in every critical industry."
That message to Mr Huang and Nvidia came less than a day after Mr Trump announced on social that he had told Chinese President Xi Jinping that Nvidia's H200 chips, which are used in AI development, could be sold to "approved customers in China and other countries under conditions that allow for continued strong national security".
Democratic Senator Elizabeth Warren was also highly critical of Mr Trump's announcement.
"This risks turbocharging China’s bid for technological and military dominance, and undermining US economic and national security," she said.
Senate minority leader Chuck Schumer said Mr Trump was going against his campaign pledge to "be tough on China".
"Donald Trump is just selling out America for his own ego and his own gain," Mr Schumer said. He added that, in his assessment, Mr Trump was desperate to "get a deal with President Xi".
Earlier, the US Justice Department announced "Operation Gatekeeper", which "exposed a sophisticated smuggling network that threatens [US] security by funnelling cutting-edge AI technology to those who would use it against American interests".
The Justice Department said in a statement announcing the reported smuggling operation that the chips involved – Nvidia's H100 and H200 – are "the building blocks of AI superiority and are integral to modern military applications".
On Monday, Nvidia issues a statement saying: "We applaud President Trump's decision to allow America's chip industry to compete to support high-paying jobs and manufacturing in America."
An Nvidia representative last night said the company had little to add to the statement on Tuesday amid backlash from some in Washington.
Various details about Mr Trump's plan to allow for the H200 to be used in China are still unclear. It is also not entirely certain if China will embrace the H200.
Several months ago media reports suggested that China had blocked the import of Nvidia's less powerful H20 due to an investigation by the country's authorities about reported “backdoor features” that would allow for the chips to be compromised.
Nvidia has repeatedly denied the allegations that the company's products have "kill switches and backdoors".
For more than a year, Nvidia and Mr Huang have sought to change US export laws related to powerful semiconductors.
Supporters of the strict US export laws say the policies help to protect American technology from falling into the wrong hands, but companies such as Nvidia, Microsoft and others have claimed that the protectionist policies harm US influence amid a global race for AI dominance.
