By David Shepardson and Karen Freifeld
WASHINGTON, July 14 (Reuters) – A top U.S. official told Congress on Tuesday that a small number of Nvidia H200 chips, one of the company’s most powerful AI chips, have been shipped to China to date.
“There have been minimal exports of any H200s to China so far,” Jeffrey Kessler, under secretary of commerce for industry and security, told the House Foreign Affairs Committee. He said shipments of H200 chips have begun but the number was “very few.”
Reuters reported on Tuesday that a unit of telecoms gear maker ZTE Corp and two other Chinese firms were among the latest entities to receive U.S. approval to purchase advanced AI Nvidia and AMD chips.
In May, Reuters reported the Commerce Department had cleared around 10 Chinese firms to buy the H200, but no deliveries had been made at the time. Sources said at the time that Alibaba, Tencent and ByteDance were among those approved.
Kessler said the Commerce Department has provided a confidential list of applications for H200 chips and their status to Congress but did not elaborate.
EXPORT CONTROLS UNDER SCRUTINY
Sales to China of Nvidia’s H200 chips have become a flashpoint in the broader U.S.-China technology rivalry. Washington has sought to limit Beijing’s access to cutting-edge chips that could be used for military applications.
U.S. Representative Gregory Meeks, top Democrat on the House Foreign Affairs Committee, on Tuesday criticized the Commerce Department for not adding any Chinese companies to an export control list since October, which is the longest period in more than a decade.
He said President Donald Trump “has turned (export controls) into a bargaining chip in broader negotiations with China” and “weakened existing safeguards, including by approving licenses for advanced AI chips destined for China.”
Kessler defended the department’s posture and said it was important to enforce the existing list of Chinese companies facing restrictions.
AI CHIP RULES STILL IN WORKS
He said more action was coming on AI regulations.
“I don’t want to replace the diffusion rule because I don’t think the rule is worth replacing,” Kessler said, referring to a Biden-era rule controlling global access to AI chips. The rule would have stymied the global AI ecosystem, he said.
But he added, “There will be future regulatory action in the area of chips and AI.”
SMUGGLING CONCERNS RAISED IN HEARING
Republican Representative Bill Huizenga sharply criticized Kessler for guidance the Commerce Department issued on May 31 about a potential loophole that may have allowed subsidiaries of Chinese companies outside China to obtain Nvidia Blackwell chips, which are even more sophisticated than H200s.
Huizenga asked why the guidance said Chinese companies could keep any Blackwell chips “that they may have gotten through either smuggling or other loopholes.”
Kessler said if companies had not been licensed for the chips they should self-disclose the violation.
Huizenga said the bureau should be clear with the Chinese that they cannot keep the Blackwells and that they had had multiple conversations about it.
“That is just a frickin’ circle that you talk in, and I’m sorry but this is unacceptable,” he said.
Kessler also defended the decision of the Trump administration on Friday to loosen export controls on the United Arab Emirates, making it easier to export Nvidia AI chips, military equipment, commercial satellites and spacecraft in a boost to relations between the two allies.
Last month, Reuters reported that the Commerce Department had held off on adding China’s AI startup DeepSeek, memory chip maker ChangXin Memory Technologies and more than 100 other companies flagged as national security risks to the “Entity List,” according to two people familiar with the matter, as the Trump administration tries to avoid escalating tensions with Beijing.
U.S. companies cannot ship goods, software and technology to companies on the list without a license, which is likely to be denied.
(Reporting by David Shepardson and Alexandra Alper in Washington and Karen Freifeld in New York; Editing by David Gregorio and Matthew Lewis)
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