How Nvidia is tangled in Trump’s dispute with China; 5 things to know
Nvidia made an agreement with the Trump administration that would allow China to sell certain artificial intelligence (AI) plugs to China in exchange for paying 15% of its income to the US government.
Advanced micro devices (AMD) signed this agreement for some chips that are a step to maintain America’s dominance while making a critical trade agreement with China.
This agreement follows an earlier ban on the export of certain chips, including Nvidia’s H20 and AMD’s MI308, which is part of a wider effort to slow down China’s progress in AI and maintain the US technological superiority. Cnn notified.
Agreement
According to the terms of the agreement, Nvidia and AMD will pay 15% commission to the US government on the revenue from the sales of these “less developed” chips in China. The agreement provides an effective way for companies to obtain the necessary export licenses that are blocked.
The agreement only says that Nvidia’s H20 chips are “old ve and add that China is“ already different ”.
What does Trump want?
Trump initially searched for a 20% deduction, while last week, the White House was reportedly fell to 15% during the meeting with Nvidia CEO Jensen Huang.
The Nvidia released the H20 chip as a way to maintain access to the Chinese market last year. The chip manufacturer has a very powerful chips, including the H100 and H200 series chips, as well as the “super -advanced” Blackwell Cips Series.
Trump said Nvidia could export the super high -level Blackwell chips, but the company would have to pay a higher commission to the US government.
What will be national security now?
The reversal of the administration acknowledges that China is progressing in AI, regardless of the US restrictions, and that it is better to benefit from this market rather than forcing China to develop its alternatives or to buy a chip through illegal channels.
In addition, it can give billions of dollars to the White House to spend another way to generate income for the US government.
This approach will be compatible with the arguments of Nvidia Huang, who says that it is bad for US national security, because Chinese developers can weaken US leadership by creating their own alternatives.
In spite of this recent approach, an concern continues: It is believed that the H20 chips, which were previously exported to China, contributed to Deepseek, an advanced Chinese artificial intelligence model that waved the Silicon Valley after the release of this year, and expresses concerns that China is more ahead of the AI.
What does this mean to Nvidia?
For Nvidia, this agreement is an important development, as the Chinese market constitutes approximately 13% of its sales in 2024. After the Trump administration prevented the sale of H20 chips to China in April, billions of dollars for the company resulted in lost income. Cnn notified.
Therefore, even if the company has to reduce 15% of these sales to the White House, it allows the H20 to continue its posts to China, which means billions of more income for Nvidia.
How much could Nvidia and AMD do from this agreement?
Nvidia and AMD, H20 and MI308 chips can earn $ 35 billion a year for China, Cnn. This means that the White House will generate approximately 5 billion dollars.
