Josh Shapiro Says Donald Trump Helped China Gain Edge in AI Race Ahead of Xi Meeting - Newsweek

Pennsylvania Governor Josh Shapiro on Thursday accused President Donald Trump's administration of helping China gain ground in the artificial intelligence race by allowing Nvidia to sell advanced AI chips to approved Chinese customers.

The criticism comes ahead of a high-stakes meeting between Trump and Chinese President Xi Jinping, where Shapiro says artificial intelligence should top the agenda.

The dispute highlights a broader debate over whether allowing chip exports strengthens American companies or risks boosting China's technological capabilities.

Speaking at the AI Horizons 2026 Summit in Pittsburgh, Shapiro, a Democrat, said the Republican administration's actions undercut Trump's own calls for the United States to beat China in AI development.

"And while Donald Trump talks a big game about beating China on AI development, his administration cut a deal to sell some of our most advanced chips to Chinese companies, giving them a leg up over American entrepreneurs," Shapiro said.

He continued, "That is a mistake. Real leadership means keeping America ahead of China in AI innovation, pushing Beijing on practical guardrails to reduce risks to the American people, and putting effective safety measures in place here at home."

Shapiro appeared to be referring to the Trump administration's decision, announced in December and formally implemented in January, to allow Nvidia to export H200 artificial intelligence chips to approved customers in China under revised licensing rules. Administration officials and the Silicon Valley company have argued the policy allows U.S. firms to compete globally while maintaining safeguards designed to protect national security.

Critics, including some congressional China hawks, contend the move accelerates China's AI development and weakens America's technological advantage.

Newsweek has reached out to the White House and Nvidia for comment.

The fight reflects a broader debate over how best to compete with China: by restricting access to advanced American technology or allowing U.S. companies to compete in the Chinese market under strict safeguards.

The Trump administration has defended the policy to maintain U.S. competitiveness while imposing safeguards on exports. Announcing the decision, Trump said the sales would be permitted only under conditions that allow for "continued strong National Security."

"The administration's critics are unintentionally promoting the interests of foreign competitors on U.S. entity lists—America should always want its industry to compete for vetted and approved commercial business, supporting real jobs for real Americans," Nvidia said in January.

But lawmakers from both parties have raised concerns about providing China access to advanced computing power at a time when AI is becoming a critical arena of economic and military competition.

Representative Brian Mast of Florida, the Republican chairman of the House Foreign Affairs Committee, warned earlier this year that "Companies like Nvidia are requesting to sell millions of advanced AI chips, which are the cutting edge of warfare, to Chinese military companies like Alibaba and Tencent.”

Shapiro, a Democrat frequently mentioned as a possible 2028 White House candidate, aligned himself with those concerns, portraying the administration's export policy as inconsistent with its broader message about confronting China.

The governor used Thursday's speech to argue that artificial intelligence should be a top agenda item when Trump meets Xi next week.

"I've said before, and believe to this day, we need to beat China on AI," Shapiro said.

However, he rejected what he described as a false choice between competing with China and imposing stricter safeguards on AI development.

Shapiro said the United States should pursue international standards governing advanced AI systems while also maintaining a technological edge over Beijing. He called for discussions involving allies and competitors alike and said the federal government should lead efforts to establish common rules and safety standards.

"That should start next week, when President Xi visits the United States," Shapiro said. "This should be among the top items on President Trump's meeting agenda."

He added, "I, for one, hope President Trump will leave the bluster and showmanship at the door and engage proactively and responsibly on this issue that is critical to our nation’s future."

Much of Shapiro's address focused on his argument that the federal government has failed to keep pace with the rapid evolution of AI technology.

The governor called for stronger oversight of frontier AI models, increased transparency requirements and independent reviews of advanced systems before they are widely deployed.

"I've called on the federal government to step up and regulate the AI industry," he said.

Shapiro has also pursued AI-related oversight efforts in Pennsylvania. Last month, he signed an executive order, Protecting Pennsylvania Consumers From Data Center Projects, imposing new requirements on AI data center developers amid concerns about energy use, transparency and local impacts.

He compared AI regulation to existing oversight of industries such as aviation and pharmaceuticals, arguing that technologies capable of having significant societal impacts should face similar scrutiny.

Shapiro also criticized congressional leaders for leaving Washington earlier than expected instead of focusing on AI legislation, warning that the technology could advance substantially before lawmakers return after the election.

"By the time Congress comes back into session after the election, we could be dealing with a whole new generation of generative AI, and more scary examples of AI agents going rogue," Shapiro warned.

Despite his warnings, Shapiro stressed that he is not opposed to AI development, pointing to Pennsylvania companies using the technology in infrastructure, health care and agriculture.

But he also warned about risks ranging from misinformation and cyber threats to AI companion chatbots that provide harmful advice, citing Pennsylvania's lawsuit against Character.AI as an example of efforts to fill what state officials see as gaps in federal oversight.

The speech highlighted a central question facing policymakers: how to harness AI's benefits while addressing concerns about safety, transparency and national security.

With Trump set to meet Xi and Washington divided over AI regulation and chip exports, those debates are likely to intensify.

Newsweek’s reporters and editors used Martyn, our AI assistant, to produce this story. Learn more about Martyn here.

Contact Newsweek editors on this story: Samantha Beech and Gray R. Thomas