Donald Trump calls Nvidia's H20 chips obsolete as he allows Nvidia to sell AI chips to China; says he told CEO Jensen Huang: Listen, I want 20% if ...
Donald Trump
on Monday, August 11, suggested that he might allow
Nvidia
to sell a scaled-down version of its next-generation advanced GPU chip in China, despite deep-seated fears in Washington that China could harness American artificial intelligence capabilities to supercharge its military. According to a report by Reuters, "Trump also confirmed and defended an agreement calling for the U.S. AI chip giant Nvidia, led by
Jensen Huang
, and
Advanced Micro Devices
to give the U.S. government 15% of revenue from sales of some advanced computer chips in China, after his administration greenlit exports to China of less advanced AI chips known as the
Trump confirmed an agreement requiring Nvidia, led by CEO Jensen Huang, to pay the U.S. government 15% of revenue from certain advanced chip sales in China, following the administration's approval last month to export less advanced H20 AI chips to the region.
'Jensen also has the new chip, the Blackwell. A somewhat enhanced-in-a-negative-way Blackwell. In other words, take 30% to 50% off of it,' Trump told reporters, referring to a reduced-capability version of the chip, according to the report. He added that Nvidia's CEO would discuss this 'unenhanced version' with him.
The Trump administration had halted Nvidia's H20 chip sales to China in April but granted clearance last month for resumed shipments, the report noted. Trump described the H20 as 'obsolete,' stating, 'China already had it'. "The H20 is obsolete," Trump said, adding China already had it. "So I said, 'Listen, I want 20% if I'm going to approve this for you, for the country'," he added.
What Nvidia said on revenue sharing with the American government
A Nvidia spokesperson told Reuters, 'We follow rules the U.S. government sets for our participation in worldwide markets,' adding, 'While we haven't shipped H20 to China for months, we hope export control rules will let America compete in China and worldwide.
"The U.S. Commerce Department has begun issuing licenses for H20 chip sales to China, a U.S. official told the news agency, though details remain undisclosed. The curbs on chip exports are expected to cost Nvidia billions, with the company warning that a halt in H20 sales could reduce its July quarter revenue by $8 billion. Nvidia's China revenue for the fiscal year ending January 26 was $17 billion, or 13% of total sales, as per the report.
Analysts question the logic of the decision
A Financial Times report, cited by Reuters, said that Nvidia agreed to the revenue-sharing arrangement to secure export licenses. The decision has left many analysts and experts baffled as they question the logic of resuming sales if the chips could pose a national security risk. "Decisions on export licenses should be determined by national security considerations and the tradeoffs of U.S. policy goals, not a revenue-creating possibility," quoted Martin Chorzempa, senior fellow at the Peterson Institute for International Economics, an independent research institution, in the report.
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