Nvidia and AMD to Share Revenue with US Government on China AI Chip Sales
American semiconductor giants Nvidia and Advanced Micro Devices have reportedly agreed to pay the US government 15% of their revenue from sales to China of chips designed for artificial intelligence (AI). This information surfaced on Sunday, August 10, according to multiple news outlets.
Donald Trump confirmed the information regarding Nvidia on Monday. “I told them (…), I want you to pay something to our country, because I am granting you an exemption,” the President told reporters at the White House, insisting that the H20 chips are not cutting-edge. Nvidia had designed them to comply with export restrictions on advanced components to China.
Nvidia CEO Jensen Huang met with the President at the White House on Wednesday and agreed to return a portion of his revenue to the US government, a highly unusual arrangement in international technology trade. According to sources, citing a US official, this was a “condition for obtaining export licenses to the Chinese market that were granted to them last week.”
“We follow the rules established by the US government for our participation in global markets,” Nvidia stated on Monday in a written response, without mentioning the 15%. “Although we have not shipped H20 chips to China for months, we hope that export control rules will allow America to be competitive in China and around the world,” Nvidia further commented.
Major Stake
The Californian company is at the heart of the technological rivalry between Beijing and Washington. Chinese companies’ access to its advanced H20 chips is a major issue in trade discussions between the two powers.
However, at the beginning of July, Nvidia announced that it would resume sales of its H20 chips in China after US authorities lifted certain export restrictions to the Asian country.
Nvidia, the world’s leading semiconductor producer, became the first company to exceed $4 trillion in market capitalization in July, demonstrating how much the markets are betting on artificial intelligence, which is revolutionizing the global economy.
Advanced Micro Devices (AMD), based in Silicon Valley, will also pay 15% of its revenue on sales in China of its MI308 chips, whose export to that country was previously prohibited. According to reports, this agreement could bring more than $2 billion to the US government. Donald Trump announced on Wednesday that he intended to impose 100% tariffs on “chips and semiconductors,” without specifying, for the time being, the date of entry into force of this new customs tax.
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