White House national economic adviser Kevin Hassett said the Trump administration allowed Nvidia’s (NASDAQ:NVDA) H20 AI chip shipments to China in a strategic move to maintain the U.S. lead in advanced chip development.

White House National economic adviser Kevin Hassett, in an apparent reference to Nvidia's H20 AI chip shipments to China, said President Trump and his team decided to let the chips go in a bid to stop China from getting ahead in the race to make the best chips.

Any safety concern by Beijing could jeopardize the sale of H20 chips in China. Citing unnamed U.S. AI experts, the Chinese regulators said Nvidia has developed mature technology t

The cyberspace regulator in Beijing said it questioned Nvidia over its H20 chips, which Washington only recently allowed to resume being exported to China.

The Chinese government fears that H20 GPUs pose a spying risk, but Nvidia says its products do not have backdoors.

Chinese companies showcased A.I. gains in Shanghai this week. More chips will only help them improve faster, industry insiders say.

The Chinese government announced Thursday it met with Nvidia in regard to potential security risks in an AI chip it developed for sale in China.

Nvidia earlier this month said the U.S. government is giving permission to sell its H20 microchip again in China — but now a Chinese regulator is raising a red flag.