Washington: US President Donald Trump announced Monday an agreement with China's President Xi Jinping allowing Nvidia to export advanced H200 AI chips to approved customers in China and other countries under strict national security conditions.

The deal reverses Biden-era restrictions that blocked such high-performance chips over concerns about Chinese military applications, with Trump posting on Truth Social that "President Xi responded positively! $25% will be paid to the United States of America."

Trump criticised predecessor policies for forcing US firms to build "degraded" chips for China at great cost, slowing innovation and harming workers. Nvidia welcomed the move, stating it "strikes a thoughtful balance that is great for America" by supporting jobs while vetting commercial customers via the Commerce Department.

The agreement excludes Nvidia's cutting-edge Blackwell series and upcoming Rubin processors, available only to US clients; H200 chips lag about 18 months behind state-of-the-art GPUs essential for training generative AI models.

Implementation details for Nvidia, AMD, Intel, and others are being finalised by Commerce, amid US-China AI rivalry. Critics like Senator Elizabeth Warren decried it as favouring China via backroom deals, potentially boosting its military, while others called it a policy misstep given the H200's superior power.

With inputs from AFP