Key Takeaways
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- Nvidia and AMD will give the Trump administration 15% of their AI chip sales to China as part of export approval deals.
- The Commerce Department has begun issuing licenses for Nvidia’s H20 chip and AMD’s MI308 chip to China after a pause in exports.
- The H20 chip is designed for AI inference tasks and is less powerful than Nvidia’s latest models.
- The deals follow Nvidia CEO Jensen Huang’s meeting with President Trump and include exemptions from new chip tariffs for U.S. investors.
- The agreements reflect the U.S. government’s strategy to raise revenue while managing national security concerns over AI technology exports.
What’s Happening?
Nvidia and AMD have struck deals with the Trump administration to share a portion of their AI chip sales to China, specifically 15%, in exchange for export licenses. This arrangement allows Nvidia to export its H20 AI chip and AMD its MI308 chip to China, resuming shipments halted in April amid rising U.S.-China trade tensions.
The deals came shortly after Nvidia CEO Jensen Huang met with President Trump, who also announced exemptions from new chip tariffs for companies investing in the U.S. The H20 chip, designed for the Chinese market, is less powerful than Nvidia’s latest models but supports AI inference tasks. The U.S. government aims to balance economic interests with national security concerns, as AI chips could enhance China’s technological and military capabilities.
Why Does It Matter?
This deal is significant because it represents a rare instance where major tech companies effectively pay the U.S. government for export licenses, highlighting the administration’s innovative revenue strategies. It also underscores the delicate balance between fostering U.S. tech competitiveness globally and protecting national security.
The export of AI chips to China is a contentious issue, with concerns about technology transfer and military applications. The agreements signal ongoing negotiations and cooperation amid broader U.S.-China trade tensions, with semiconductor access remaining a critical point of contention.
What’s Next?
The Commerce Department will continue issuing licenses for AI chip exports to China, with the financial and operational details of the revenue-sharing agreements still being finalized. Market watchers will monitor how these exports impact the competitive landscape between U.S. and Chinese AI technology firms.
The U.S. government’s approach may set a precedent for future export controls and revenue models. Meanwhile, Nvidia and AMD will navigate the challenges of complying with export regulations while meeting growing demand in China. The broader U.S.-China trade negotiations will likely influence the scope and terms of future technology exports.
