President Donald Trump has signaled openness to allowing Nvidia to sell a downgraded version of its most advanced Blackwell AI chip to China, potentially reducing performance by 30-50%. This development comes as part of ongoing negotiations over semiconductor exports, with Nvidia and AMD already agreeing to pay the U.S. government a 15% revenue cut from Chinese chip sales in exchange for export licenses.
What you should know: Trump indicated he would consider approving a “somewhat enhanced — in a negative way” Blackwell processor for Chinese markets.
- The president said he plans to meet with Nvidia CEO Jensen Huang specifically about the Blackwell system, which he called the “latest and the greatest in the world.”
- Any downgraded Blackwell approval “would be a big deal going forward,” according to Paul Triolo, partner at advisory firm DGA-Albright Stonebridge Group.
The revenue-sharing deal: Nvidia and AMD have agreed to unprecedented terms with the U.S. government for Chinese market access.
- Both companies will pay a 15% cut of revenue from chip sales to China in exchange for export licenses.
- Trump initially requested a 20% cut but settled on 15% after negotiations with Huang.
The strategic rationale: Industry experts see the potential downgraded chip sales as part of a broader technological dependency strategy.
- “The idea here is to addict China to substandard, or non-cutting edge technology,” Triolo explained.
- Huang has argued that cutting off China from American chips would simply allow domestic competitors like Huawei to fill the void, making Chinese firms less dependent on U.S. technology.
China’s current situation: Chinese companies are navigating a complex transition as existing chip stockpiles dwindle.
- Firms stockpiled Nvidia’s A100 and H100 chips before export restrictions took effect in 2022 and 2023, and are still using them to train AI models.
- “We are in sort of a transition point of running out of those stockpiles of earlier acquired Nvidia GPUs,” Triolo noted.
The Huawei factor: China’s domestic chip development continues advancing despite export restrictions.
- Huawei, a Chinese tech giant, is developing its Ascend series processors as an Nvidia alternative, though current versions aren’t yet fully competitive.
- Triolo expects Huawei to release a new version of its 910 processors next year that will be “more competitive with Nvidia.”
What remains unclear: Key details about the potential downgraded Blackwell chips haven’t been specified.
- The exact capabilities of a downgraded Blackwell system for China remain undefined.
- Whether such chips would be suitable for training advanced AI models is still uncertain.
Recent Stories
DOE fusion roadmap targets 2030s commercial deployment as AI drives $9B investment
The Department of Energy has released a new roadmap targeting commercial-scale fusion power deployment by the mid-2030s, though the plan lacks specific funding commitments and relies on scientific breakthroughs that have eluded researchers for decades. The strategy emphasizes public-private partnerships and positions AI as both a research tool and motivation for developing fusion energy to meet data centers' growing electricity demands. The big picture: The DOE's roadmap aims to "deliver the public infrastructure that supports the fusion private sector scale up in the 2030s," but acknowledges it cannot commit to specific funding levels and remains subject to Congressional appropriations. Why...
Oct 17, 2025Tying it all together: Credo’s purple cables power the $4B AI data center boom
Credo, a Silicon Valley semiconductor company specializing in data center cables and chips, has seen its stock price more than double this year to $143.61, following a 245% surge in 2024. The company's signature purple cables, which cost between $300-$500 each, have become essential infrastructure for AI data centers, positioning Credo to capitalize on the trillion-dollar AI infrastructure expansion as hyperscalers like Amazon, Microsoft, and Elon Musk's xAI rapidly build out massive computing facilities. What you should know: Credo's active electrical cables (AECs) are becoming indispensable for connecting the massive GPU clusters required for AI training and inference. The company...
Oct 17, 2025Vatican launches Latin American AI network for human development
The Vatican hosted a two-day conference bringing together 50 global experts to explore how artificial intelligence can advance peace, social justice, and human development. The event launched the Latin American AI Network for Integral Human Development and established principles for ethical AI governance that prioritize human dignity over technological advancement. What you should know: The Pontifical Academy of Social Sciences, the Vatican's research body for social issues, organized the "Digital Rerum Novarum" conference on October 16-17, combining academic research with practical AI applications. Participants included leading experts from MIT, Microsoft, Columbia University, the UN, and major European institutions. The conference...