Trump says he asked for 20% cut from Nvidia, calls H20 an 'obsolete' chip
The comments came after news broke over the weekend that Nvidia agreed to pay the federal government a 15% cut in return for receiving export control licenses that will allow it to once again sell the H20 chip to China and Chinese companies. Nvidia's Huang visited Trump in the White House on Friday.
"I said, 'listen, I want 20% if I'm going to approve this for you, for the country,'" Trump said in a press conference in Washington.
Trump said that Nvidia's H20 is an "old chip that China already has" and is "obsolete." He compared the H20 chip to Nvidia's current fastest artificial intelligence chip, which is called Blackwell, and said that he wouldn't allow those to be sold to China without significant downgrades, such as a 30% to 50% reduction in performance.
"The Blackwell is super-duper advanced. I wouldn't make a deal with that," Trump said, adding that it was possible to make a deal for a "somewhat enhanced in a negative way" version of Blackwell.
"That's the latest and the greatest in the world. Nobody has it. They won't have it for five years," Trump said.
One reason for the U.S. export controls is fear that providing advanced chips to China could allow the foreign power to leapfrog the U.S. in AI capabilities. Many have said that could pose a threat to the national security of the U.S.
Trump said that China already has chips with some similar capabilities to the H20.
Huang has said that it is better for U.S. national security if Chinese AI developers use U.S. technology, and that denying them access to Nvidia chips would actually encourage the Chinese chip industry to develop and catch up.
"He's selling a essentially old chip," Trump said. "Huawei has a similar chip."
The H20 is a Chinese-specific chip that has had its performance slowed down. It is related to Nvidia's H100 and H200 chips that are used in the U.S. The H20 was introduced after the Biden administration implemented export controls on AI chips in 2023.
In April, the Trump administration said it would require a license to export the H20 chip, and in May, Huang said that "effectively closed" the market off to Nvidia. Huang said that Nvidia was expecting to sell about $8 billion in H20 chips in the July quarter before sales were stopped.
"While we haven't shipped H20 to China for months, we hope export control rules will let America compete in China and worldwide," an Nvidia spokesperson told CNBC on Monday.
Trump on Monday also said that Huang plans to visit him again to negotiate export licenses for the Blackwell chips.
"I think he's coming to see me again about that," Trump said.
A White House official confirmed to CNBC that AMD, the second-place AI chip maker, will also pay 15% to receive an export license for its China-focused AI chip, the Instinct MI308.
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Faster Capital Recovery: NVDY's hefty and frequent payouts can help investors achieve 'house money' status quickly, recovering their initial investment through distributions. This can substantially de-risk the investment. NVDA requires selling shares to realize profits. Occasional Upside Participation: when NVDA stock is expected to rally in the short-term (because of a sell-off or some positive development) NVDY employs the 'Covered Call Spread' strategy, allowing more upside capture versus a standard covered call if NVDA's price surges. Asymmetric Downside: NVDY's synthetic long structure caps upside but leaves investors fully exposed to NVDA's downside. High monthly income may not be able to offset losses from a sharp NVDA correction. Investor Exodus: Significant price drops in NVDY can trigger investor outflows, lowering Assets Under Management (AUM) and making it harder to generate option income efficiently, thereby creating a negative feedback loop. Distribution volatility: While NVDA offers paltry dividends, NVDY's monthly payouts can fluctuate sharply — largely because they rely on option premium income and include return of capital. When NVDA's implied volatility drops or NVDY's Net Asset Value (NAV) erodes from repeated ROC payouts, the ETF's distributions could shrink. Opportunity Cost: Historically NVDA's returns have outpaced NVDY's significantly. Simply holding NVDA stock may generate greater total returns than NVDY, especially during strong bull runs in tech. NVDA Or NVDY — Which Investor Are You? If you are betting on Nvidia as a core pillar of an AI-driven future, and seek full participation in Nvidia's growth story — you're a Growth Chaser — you pick NVDA stock. If you are comfortable with capped upside and prioritize monthly income, you're an Income Alchemist — you choose NVDY to tactically monetize volatility and generate consistent yield. If you are looking to blend growth and income — gaining exposure to Nvidia's long-term upside while securing a steady income stream, you hold both: NVDA for capital appreciation and NVDY for monthly payouts. That makes you the Hedged Optimist. Bottom Line In my view, NVDA stock remains the superior play with its compelling long-term returns despite the meager dividend. The NVDA stock has clearly demonstrated resilience by rebounding and reaching new heights after every sharp correction, highlighting its structural strength. On the other hand, NVDY's low capital requirements, exceptional yield and the potential to recover capital in a reasonable time frame are alluring. However, the risks of asymmetric downside and NAV erosion — potentially shrinking the very dividends investors seek — make NVDY better suited as a tactical, smaller allocation in a portfolio. 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