*

Trump suggested he may negotiate with Xi over exports of

Nvidia

AI chip

*

Exporting lesser version of Nvidia's ( NVDA ) Blackwell would still

cut

US AI advantage

*

Allowing the chips to China could effectively do away with

AI

chip export controls

(Updates with Nvidia ( NVDA ) statement)

By Karen Freifeld

Oct 29 (Reuters) - A leading Republican voice in

Congress on China policy said on Wednesday that selling Nvidia's ( NVDA )

best AI chip to China "would be akin (to) giving Iran weapons

grade uranium", as experts argued it would shrink the American

advantage in artificial intelligence.

House Select Committee on China Chairman John Moolenaar said

in a post on X that he told the administration, "we cannot sell

the latest advanced AI chips to our country's primary

adversary."

His comment came after President Donald Trump opened the

door on Wednesday to Nvidia ( NVDA ) selling a lesser version of

its Blackwell AI chip to China.

U.S. trade experts said giving China the chips could

effectively spell the end of U.S. chip export restrictions,

which were put in place in 2022 to make sure Beijing's military

would not benefit from American technology, and to slow the

development of China's AI efforts.

"If we decide to export B30As, it would dramatically shrink

the U.S.'s main advantage it currently has over China in AI,"

said Tim Fist, co-author of an analysis of the impact of

allowing China the B30A chip, a downgraded version of Nvidia's ( NVDA )

state-of-the-art Blackwell chip.

A spokesperson from Nvidia ( NVDA ) disagreed, saying the U.S. policy

of controlling chips under President Joe Biden did not give

America an advantage in AI. "Winning the support of mainstream

developers everywhere enhances America's economic and national

security," the spokesperson said in a statement.

"China has more than enough domestic chips for all of

its military applications and has no reason to use our products

for that purpose," the statement said.

Senate Democratic leader Chuck Schumer and 11 Democratic

senators also urged Trump on Wednesday to not lift restrictions

on AI chips and American technology in pursuit of a trade deal.

Moolenaar said, "these chips should instead go to the U.S.

companies that are building American AI dominance for years to

come - not the future of the Chinese military."

TRUMP MAY DISCUSS 'SUPER-DUPER' CHIP

Trump said on Wednesday he might speak to Chinese President

Xi Jinping about Nvidia's ( NVDA ) "super-duper" Blackwell chip at their

Thursday meeting. The comments echoed those he made in August

suggesting he might allow a 30% or 50% scaled-down version of

Nvidia's ( NVDA ) top chip to China.

But, Fist said, the B30A is a version of the best Nvidia ( NVDA )

chip in different packaging: China could buy twice as many and

get the same result, likely at the same price.

A spokesperson for Nvidia ( NVDA ) declined comment on the details

about the chip.

In the paper, published on Saturday, Fist and his co-authors

analyzed nine scenarios covering a range of export strategies

the administration might take for a downgraded Blackwell chip.

BEST- AND WORST-CASE SCENARIOS

In the best scenario, where no powerful chips are exported

to China next year, the U.S. would have 30 times the AI

computing power of China.

In the worst, where the U.S. allows the export of the B30A

and comparable chips from other U.S. companies, China could

surpass the U.S. in terms of how much AI computing power they

gain in 2026.

Even in a median scenario, where a small amount of the chips

is exported, the U.S. advantage shrinks to four times China's

computing power, the analysis found.

"If any meaningful quantities are allowed, it's a huge

change," said Fist, director of emerging technology policy at

the Institute for Progress, a Washington-based think tank. "It's

functionally ending the export control regime that we have

today."

Chris McGuire, a national security and technology expert

who served in the U.S. State Department until last summer,

agreed.

"If this chip is allowed to go, there are effectively no

AI chip export controls anymore," McGuire said. "The reason we

have a big advantage on AI is because we have big advantages in

computing power and in chips. If we give that away, best case

is, it's like a tie. Worst case, we fall behind."

"We would be trading China our most advanced technology for

soybean purchases," McGuire said.