Nvidia, AMD to Pay Government 15% of AI Chip Sales to China
Many of those involved in national security have concerns that “chips and other technology will boost China’s ecosystem and military.”
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.”
[Featured image via YouTube]
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Comments
No! Screw the 15%, I’d rather pay them to not sell to China.
BTW: You don’t always need first line chips for military or commercial applications. Russia was making due with chips from washing machines after they were embargoed because of Ukraine invasion. First line chips are just faster, bigger cache, more cores, and expel less heat. Not sure about so called AI chips but I can’t imagine it would be much different.
This isn’t the transporter or warp technology from Star Trek.
Microprocessors are a bunch of instructions fed by data. The data sits in a register… gets CISC or RISC logic applied to it (RISC in this case). It comes and goes via cache, ram, drive via bus.
I can dig a hole with a shovel or a skid steer, The question is how fast. China could easily throw more HW at the problem.
Is this a common thing for the US government to require of an American business to do business anywhere? If it isn’t then what precedent has just been established?
Scott Adams says that Trump monetizes every difficulty.
But, if uncle Sam gets his cut, suddenly these concerns go away.
I get the same feeling. I think the thinking here is that if AMD makes only 85% of the profit selling a chip to China as they do selling it anywhere else, they’ll downshift sales efforts to China. But another part of my brain sees that China can parlay that effect if they simply place an order that is so huge that AMD would be willing to give them 15% off for quantity anyway. AMD won’t give China that discount, they’ll just send it to Trump, and everybody goes home happy except the Americans in commie prison camps 50 year from now.
For those suffering from TES, (Trump Exaltation Syndrome) he has done A Wonderful Thing Showing Who’s Boss.
To a realist like me, I remember that Trump is, at bottom, a businessman circulating in the same crowd that owns businesses like AMD and is not about to do them harm.
My take on this is a slightly different spin.
The Dems portray Trump every minute of every day as a lawless tyrant king.
Stuff like this proves to everybody that he isn’t a lawless tyrant king, and that Democrats lie just because it feels good.
According to the Administration, the H20 chip (which is what we’re taking about) is not state-of-the-art, but rather an obsolete chip that simply does what other chips can do, either alone or in conjunction with other chips, so we’re not talking about a technological breakthrough.
its just wrong for djt to do this
there is no way around it
the ends dont justify the means
IANAL. But, isn’t it unconstitutional for the FedGov to levy taxes on exports? It’s the Export Clause, right? Article I.
Great result. Even the mafia seldom gets pizzo exceeding 5% for a company this large.