Johnson Criticizes U.S. Policy Reversal on Nvidia Chip Exports to China as 'Counterproductive'

• The Trump administration has reversed its stance on AI chip exports to China multiple times in 2025, creating significant policy uncertainty.
• China represents approximately 13% of Nvidia's total revenue, and the policy reversals have impacted $4.5 billion in unsold inventory.
• Critics warn that reopening access to Nvidia chips could strengthen China's military capabilities and threaten U.S. innovation.

Recent U.S. policy reversals on artificial intelligence chip exports to China are drawing sharp criticism from lawmakers and industry observers who characterize the moves as counterproductive to both national security and economic interests. The Trump administration's decision to quietly lift restrictions just three months after imposing them has created a whipsaw effect for semiconductor firms and their customers.

According to people familiar with the matter, the policy reversal was part of broader negotiations that secured China's commitment to resume shipments of rare-earth minerals essential to U.S. manufacturing. The abrupt change allows Nvidia to resume sales of certain AI chips to China, including its H20 inference GPU featuring 96 GB of HBM3 memory and the new RTX PRO series built on Blackwell architecture.

Nvidia CEO Jensen Huang is now working to "accelerate the recovery" of the company's substantial unsold inventory and rebuild relationships with Chinese customers, according to internal communications viewed by sources. The Chinese market represents a crucial revenue stream for the chipmaker, accounting for approximately 13% of total sales and hosting about half of all global AI developers.

The repeated policy shifts have created significant disruption for China's semiconductor ecosystem, causing price spikes and workforce reductions while accelerating the country's push toward domestic semiconductor self-sufficiency by 2027. Chinese companies including DeepSeek, Baidu, and Alibaba have already developed competitive AI models using midrange chips through innovative software techniques.

Critics of the policy reversal warn that it could undermine both economic and security objectives. "Reopening access to Nvidia chips could strengthen China's military capabilities, suppress citizens and threaten U.S. innovation," said one congressional aide familiar with the matter, echoing concerns raised by lawmakers including Rep. John Moolenaar.

The export controls originated under President Biden in October 2022 and were progressively tightened through 2023 and 2024 before the Trump administration's recent back-and-forth approach. The policy uncertainty has complicated strategic planning for U.S. semiconductor companies, which have lost substantial revenues from curtailed China sales, reducing funds available for critical research and development.

White House officials did not immediately respond to requests for comment on the characterization of the policy as counterproductive. AMD has indicated progress on license applications for its MI308 chips, suggesting the policy shift may extend beyond Nvidia's products.

Correction: An earlier version of this article misstated the timeline of the initial policy implementation. The export controls were first implemented in October 2022, not 2023.