Trump officials discussing tightening curbs on Nvidia's China sales, sources say

By Karen Freifeld and Alexandra Alper

(Reuters) - U.S. President Donald Trump's administration is considering tightening restrictions on artificial intelligence leader Nvidia's sales of its H20 chips designed for the China market, three people familiar with the matter said.

Conversations to restrict shipments of those chips to China are in very early stages among Trump officials, the people said, adding the idea has been under consideration since Democratic former President Joe Biden's administration. H20 chips can be used to run AI software and were designed to comply with existing U.S. curbs on shipments to China, spearheaded by Biden.

The White House did not respond to requests for comment. Nvidia said in a statement it is "ready to work with the administration as it pursues its own approach to AI."

Nvidia shares, which were already down for the day, added slightly to losses after the news, first reported by Bloomberg.

Worries are mounting that China is catching up to the U.S. in AI development after China's DeepSeek last week launched a free assistant it says uses less data at a fraction of the cost of incumbent players' models, possibly marking a turning point in the level of investment needed for AI.

"This topic has been discussed for more than half a year," among high-level officials, said Lennart Heim, a researcher at RAND, saying it was a recommendation made during the Biden administration as well. "DeepSeek highlights it," he added.

Biden, who left office this month, put in place a raft of restrictions barring exports of AI chips to China and capping their shipment to a host of other countries. However, some AI chips, including Nvidia's H20 can still be lawfully shipped to China.

(Reporting by Arsheeya Bajwa in Bengaluru, Alexandra Alper in Washington and Karen Freifeld in New York; Editing by Pooja Desai and David Gregorio)

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