US chipmakers to pay Washington for trade with China
At the center of the reported quid pro quo deal are Nvidia's China-specific H20 graphics processing unit and AMD's MI308 chip, both of which were restricted by US regulators in April amid escalating tensions between Washington and Beijing. At the time, officials warned that the chips could be used to advance the PRC's military artificial intelligence capabilities.
The reported agreement comes a month after Washington announced that Nvidia would be allowed to resume sales of its H20 chips in China. However, the New York Times noted that the US government had not actually issued the licenses required to make those sales possible at that time.
The US Commerce Department reportedly began granting H20 export licenses only last Friday, two days after Nvidia CEO Jensen Huang personally met with US President Donald Trump. A US official told the Financial Times that the administration had also started issuing licenses for AMD's chip.
'We follow rules the US government sets for our participation in worldwide markets,' Nvidia told the FT, declining to either confirm or deny the agreement.
The deal could funnel over $2 billion to the US authorities, the NYT noted. The administration has yet to decide how to use the money, two people familiar with the arrangement told the FT.
According to projections by Bernstein Research analysts, as cited by the NYT, Nvidia is expected to sell more than $15 billion worth of chips to China, while AMD's sales could reach $800 million by the end of the year.
The latest deal follows long-standing controversy over Nvidia's H20 chip. The company was forced to tailor the product for the Chinese market after the previous US administration imposed strict export controls on more advanced chips used for artificial intelligence (AI).
Trump's reversal on the issue has sparked a wave of criticism, with security experts warning that the H20 could aid the Chinese military and undermine US strength in the AI sector.
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