The announcement marked a significant shift in US export policy for advanced AI chips, which Joe Biden's administration had heavily restricted over national security concerns about Chinese military applications.

Democrats in Congress quickly dismissed the shift as a huge mistake that will help the Chinese military and economy.

In a post on his Truth Social platform, Trump said he had informed Xi that Washington would permit Nvidia to ship its H200 products to "approved customers in China, and other countries, under conditions that allow for continued strong National Security."

"President Xi responded positively! $25% will be paid to the United States of America," Trump wrote, without providing details on how the payment mechanism would work.

Trump criticized his predecessor's approach, saying it "forced our Great Companies to spend BILLIONS OF DOLLARS building 'degraded' products that nobody wanted, a terrible idea that slowed Innovation, and hurt the American Worker."

This referred to the Biden administration's requirement for chip companies to create modified, less powerful versions specifically for the Chinese market.

These chips had reduced capabilities -- lower processing speeds, for example -- to comply with export control regulations.

Chinese foreign ministry spokesman Guo Jiakun did not directly confirm the agreement when asked, but said that "China has always advocated for mutual benefit and win-win outcomes through cooperation between China and the United States."

- Not Blackwell -

Under Biden-era restrictions, the H200 and similar advanced chips were blocked from export to China.

"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 spokesperson told AFP.

"Offering H200 to approved commercial customers, vetted by the Department of Commerce, strikes a thoughtful balance that is great for America."

Trump emphasized that Nvidia's most advanced chips -- the Blackwell series and forthcoming Rubin processors -- are not included in the agreement and remain available only to US customers.

The H200s are roughly 18 months behind the company's state-of-the-art offerings.

The chips -- graphic processing units or GPUs -- are used to train the AI models that are the bedrock of the generative AI revolution launched with the release of ChatGPT in 2022.

The Commerce Department is finalizing implementation details, with Trump saying "the same approach will apply to AMD, Intel, and other GREAT American Companies."

- AI race -

The announcement comes as Washington and Beijing compete for dominance in artificial intelligence technology.

Nvidia CEO Jensen Huang lobbied the White House intensely to reverse the Biden-era policy despite considerable opposition in Washington to giving Chinese companies access to powerful chips.

Massachusetts Senator Elizabeth Warren, a Democrat, attributed the deal to a "backroom meeting" with Trump and Huang's company's donation to build the East Wing ballroom at the White House.

She and other senior Democrats in the Senate issued a separate statement calling Trump's decision "a colossal economic and national security failure."

"Access to these chips would give China's military transformational technology to make its weapons more lethal, carry out more effective cyberattacks against American businesses and critical infrastructure and strengthen their economic and manufacturing sector," the lawmakers said.

Trump's post came the same day the US Justice Department announced the arrests of two Chinese businessmen in connection to an alleged scheme to smuggle Nvidia H100 and H200 chips from the US to China. It is unclear whether the agreement will impact the case.

Alex Stapp, of the Washington-based Institute for Progress, called the policy a "massive own goal," with the H200 "6x more powerful than the H20, which was previously the most powerful chip approved for export."

Zhang Yi, founder of Chinese tech research firm iiMedia, said that having Nvidia AI GPUs on the market was unlikely to reverse Beijing's push to develop its own advanced chips.

"Instead, it will actually force its acceleration," with a 25-percent US charge increasing costs for Chinese companies, which already hold concerns over supply chain security, he told AFP.

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