White House Artificial Intelligence Czar David Sachs said China understands America’s strategy, which allows it to buy “H200” chips manufactured by Nvidia, and rejected this artificial intelligence chip in favor of domestically developed semiconductors, citing news reports. US President Donald Trump said on Monday that he would allow Nvidia to ship H200 chips to China, as part of an effort by the administration, backed by Sachs, to challenge Chinese technology companies such as Huawei Technologies by introducing American competition to their domestic market. But Sachs indicated on Friday that he was unsure whether that approach would work. Trump allows Nvidia to sell advanced artificial intelligence chips to China China seeks independence in semiconductors “They reject our chips,” Sachs said in an interview on “Bloomberg Tech,” referring to an unspecified news article he said he saw that day. “They don’t seem to want them, and I think the reason is because they want independence in the field of semiconductors.” Sachs’ comments raise questions about whether Nvidia will be able to revive its revenue in China, a data center market that the company completely discounted in its forecasts but which CEO Jensen Huang estimated at about $50 billion this year. Bloomberg Intelligence analysts estimate the potential annual revenue for H200 chips in China at $10 billion, but that is subject to the country’s acceptance of the US company’s chips. “Nvidia” export restrictions benefit America’s competitors. Nvidia said in a statement through its spokesperson that it continues to cooperate with the administration regarding “H200” licenses for customers subject to audit. The statement added: “While we do not yet have results to announce, it is clear that three years of overly broad export controls have fueled America’s foreign competitors and cost American taxpayers billions of dollars.” China is considering an incentive package worth up to $70 billion to support the domestic chip industry, Bloomberg reported on Friday, in a move that reaffirms Beijing’s determination to reduce its reliance on foreign chipmakers such as NVIDIA. This suggests that the government will continue to support companies such as Huawei and Cambricon Technologies even if America allows the export of H200 chips to China. Where does the “H200” of NVIDIA’s chips fall? Launched in 2023 and starting shipping to customers last year, the “H200” chip belongs to NVIDIA’s “Hopper” generation chips, which are less advanced than the “Blackwell” line and two generations behind the upcoming “Rubin” series. The roughly 18-month delay in the latest Nvidia chips was part of the Trump administration’s justification for making the decision. Sachs, a venture capitalist who joined the board in January, attributed China’s reluctance to buy H200 chips to Beijing’s desire to support and provide subsidies to Huawei. However, he defended the decision to allow China access to the H200 chips, describing them as “late” technology and no longer cutting edge. “Nvidia”: There are no plans to send “Blackwell” artificial intelligence chips to China. Sachs explained: “What we see is that China is not buying them because it wants to support (Huawei) and give subsidies to it. It was part of our calculations, that is, to sell chips that are not the best, but rather late, to China, on the basis that you can take away a market share from (Huawei), but I think the Chinese government did not allow it, and that is why it is.” Beijing supports “Huawei”, the most prominent rival to “NVIDIA” in China. The decision to allow the export of “H200” was prompted by an assessment that “Huawei”, the most prominent Chinese competitor to “NVIDIA”, offers artificial intelligence systems with similar capabilities, including the “Cloud Matrix 384” platform, which connects hundreds of processors together to compensate for the decrease in performance in individual chips. Some US officials viewed the H200 as a compromise compared to Nvidia’s previous payment to export a copy of the Blackwell chip to China, according to a person familiar with the matter. Why did Trump suddenly allow Nvidia to sell advanced chips to China? The answer lies with Huawei. Huang said last week, while officials were studying the decision, that he was not sure whether China would accept H200 chips. Trump said in a post on the Truth Social platform on Monday that Chinese President Xi Jinping has responded positively to the possibility of approving H200 exports. Beijing has not yet publicly agreed to allow imports of H200 products from Nvidia. Nor has it publicly announced its rejection of it, despite the recent change in US policy. Earlier this year, China refused to buy the far less capable H20 chip that Trump authorized this summer.