Nvidia and AMD will give 15% of their Chinese chip sales to the government as a condition for the companies to export the items to the communist country.
From The Wall Street Journal:
The Trump administration will receive 15% of the sales as part of a deal to approve exports of Nvidia’s H20 AI chip to China, according to people familiar with the matter. That could amount to billions of dollars given demand for the H20 chips and is the latest example of the White House employing novel tactics to raise revenue.The administration has reached the same agreement with AMD for its MI308 chip, the people said. Details of the arrangements and the financial structures are still being worked out.The Commerce Department began issuing licenses for Nvidia to send its H20 chip to China Friday, following through on a July promise. Over the weekend, the agency started moving licenses for the AMD chip, some of the people familiar with the matter said.
Nvidia and AMD stopped shipping the chips to China in April. Nvidia CEO Jensen Huang began negotiations with both countries to reach a compromise.
Nvidia promised that America’s adversaries would not receive a large quantity of chips.
Trump’s administration claimed “the H20 isn’t a top-performing chip and that they want Nvidia to compete with China’s Huawei around the world.”
Huawei is China’s top technology company.
President Donald Trump banned Huawei in 2019 due to security risks, but the moves against the company started in 2012.
Our government worried that allowing Huawei in America would allow China “to spy on critical US infrastructure, intercept communications, or steal sensitive data upon request.”
Former President Joe Biden’s administration installed strict “export restrictions on more advanced AI chips.” That move led Nvidia to construct the H20 chip for the Chinese market in 2023.
Many of those involved in national security have concerns that “chips and other technology will boost China’s ecosystem and military.”
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