US Commerce Secretary Howard Lutnick recently told a Senate committee that China had purchased no H200 chips from American suppliers. He testified that the US president was maintaining a "delicate balance" concerning technology transfers to China, given the leaders' personal relationship. Lutnick's statements aimed to alleviate congressional apprehension that US technology could be strengthening China's military capabilities. But, his assertions were met with scepticism from lawmakers.
The Commerce Secretary stressed that the United States was not providing its most advanced semiconductor technology to China under any circumstances. He reiterated, "I would tell you, they have not bought any as of today." This claim follows prior governmental authorisation earlier this year in Jan. for the export of Nvidia H200 chips to China.
But, Gregory Meeks, a leading Democrat congressman on the House Foreign Affairs Committee, criticised what he perceived as inadequate enforcement of technology export controls. He stated that the administration had "completely dropped the ball on export controls," speaking at a committee meeting for bills related to chips. This sentiment indicated a legislative chamber's disagreement with the current policy.
Earlier this week, Navy Admiral Samuel Paparo, commander of the US Indo-Pacific Command, testified that allowing the People's Liberation Army access to advanced artificial intelligence chips would enhance their war-fighting capacity. Such a development, he suggested, would come at the expense of US service members. Lutnick, however, presented an alternative perspective regarding the absence of these chips reaching the PLA.
He argued that advanced US chips were not reaching the PLA due to Beijing's strategic emphasis on cultivating home grown technology. Lutnick stated his understanding was that Chinese cloud companies sought to acquire these chips, but the Chinese central government had prevented such purchases. This policy, according to Lutnick, aimed to redirect investment towards their own domestic industry.
And, Senator Chris Coons, a Democrat from Delaware, challenged Lutnick's claims during a tense exchange. Coons asserted that the US was supplying China with powerful chips otherwise unavailable to them, suggesting the matter extended beyond mere commercial interests. He highlighted that the Nvidia H200 chips, authorised for export earlier this year, possess six times the power of the previously approved H20 chips.
The Senator further noted that the H200 chips are significantly more powerful than any semiconductors currently produced by China. Coons questioned how the Commerce Secretary could be certain that chips sold to any company would not ultimately reach the PLA. This exchange underscored the administration's difficult position.
The administration appears to be navigating a complex path between national security and economic diplomacy. This situation arises just weeks before an upcoming summit in Beijing involving the US president, known for his "America first" policy, and Chinese leader Xi Jinping. Officials defend their decision to permit limited sales of advanced AI chips to China.
The US government greenlit Nvidia's H200 after a summit between Trump and Xi in South Korea last Oct. Under the outlined terms, the US Big Tech company would pay an "export fee" equivalent to 25 per cent of sales to the US government. Nvidia CEO Jensen Huang has stated that Chinese customers placed orders for these chips.
However, Lutnick maintained this week that zero units had actually been delivered. He attributed this delay not to US intervention, but to policy decisions in Beijing prioritising self-sufficiency. The former Wall Street millionaire affirmed that the US was keeping Nvidia's newest architecture, known as Blackwell, strictly out of reach to ensure China remains a generational gap behind.
He elaborated that the US was not selling its "best scale of chips," referring to Blackwell, which he described as an older brand, to other nations. The House Foreign Affairs Committee also advanced a bipartisan package of more than 15 bills during its recent proceedings. This package included the MATCH Act, designed to strengthen oversight of chip making tools and increase civil penalties for export violations by up to 400 per cent.
As domestic concerns in the US intensify, the administration frames the upcoming Beijing summit as an opportunity to move beyond "sensitive" sectors. The focus is to shift towards traditional trade, according to US Trade Representative Jamieson Greer. He told the House Ways and Means Committee that the trip aims for a proactive agenda, discussing areas for mutual trade and sales of non-sensitive goods.
No H200 chips from US suppliers have been sold to China, despite prior authorisation.
US Commerce Secretary Howard Lutnick cited China's focus on domestic technology as a reason for not purchasing US chips.
Lawmakers expressed scepticism regarding the effectiveness of US export controls and the potential for advanced chips to reach the PLA.
The US administration aims to balance national security with economic diplomacy ahead of an upcoming summit in Beijing.
A bipartisan legislative package, including the MATCH Act, seeks to tighten oversight of chip making tools and increase penalties for export violations.
Source: SCMP
