Trump Warned by Senate Democrats Over AI Chip Sales to China

Nvidia CEO Jensen Huang, right, speaks alongside President Donald Trump in White House

Top Senate Democrats have stepped up pressure on former President Donald Trump, urging him to rethink his decision that allows U.S. tech giants to sell advanced AI chips to China.

What’s Happening?

Six influential Democratic senators, including Senate Majority Leader Chuck Schumer, sent an open letter warning that Trump’s approval of AI chip sales could weaken America’s national security. The decision gives chipmakers Nvidia and AMD the green light to sell some of their most advanced processors to China — but only if they hand over 15% of revenue from those sales to the U.S. government.

Why Are Democrats Against It?

The senators argue that the deal risks America’s technological edge. In their view, sharing high-end chips like Nvidia’s H20 and AMD’s MI308 could give China a boost in developing military and security systems. They called the deal a reckless trade-off of vital U.S. technology for short-term financial gain.

The letter stressed: America has always led the world in tech by making sure competitors can’t easily access advanced innovations. Giving China access now, they argue, could put U.S. defense at risk.

What Do the Companies Say?

Nvidia disagrees with the claims. The company insists its H20 chip does not enhance military power, and instead could have positioned the U.S. strongly in the global AI race. Nvidia says blocking sales ended up hurting American taxpayers more than helping national security. AMD, meanwhile, has not yet commented.

China’s Reaction

Even as Trump allowed sales to resume, China reportedly isn’t rushing to buy U.S. chips. According to industry analysts, Beijing has directed its tech giants — including ByteDance, Alibaba, and Tencent — to hold off on purchasing Nvidia chips until regulators complete a national security review.

What’s Next?

The senators have demanded a detailed explanation from Trump’s administration by August 22 about this deal — and whether similar arrangements are being made with other companies. For now, the White House has dismissed the criticism, accusing Democrats of playing politics.

But one thing is clear: U.S.-China tensions over AI and semiconductors are heating up, and the outcome could shape the future of both global tech and national security.

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Source - CNBC