Nvidia, AMD to pay US 15% of AI chip sales to China
WASHINGTON : US semiconductor giants Nvidia and Advanced Micro Devices have agreed to pay the US government 15% of their revenue from selling artificial intelligence chips to China, according to media reports Sunday.
Nvidia CEO Jensen Huang met with US President Donald Trump at the White House on Wednesday and agreed to give the federal government the cut from its revenues, a highly unusual arrangement in the international tech trade, according to reports in the Financial Times, Bloomberg and the New York Times.
According to the Financial Times, the artificial intelligence chips that are part of the agreement with the US government are Nvidia's 'H20' and the 'MI308' from Advanced Micro Devices (AMD).
Nvidia did not deny the reported deal when approached for comment.
'We follow rules the US government sets for our participation in worldwide markets,' a spokesperson told AFP.
'While we haven't shipped H20 to China for months, we hope export control rules will let America compete in China and worldwide.'
The company spokesperson added, 'America cannot repeat 5G and lose telecommunication leadership. America's AI tech stack can be the world's standard if we race.'
AMD did not immediately respond to enquiries for comment.
Investors are betting that AI will transform the global economy, and Nvidia – the world's leading semiconductor producer – last month became the first company ever to hit US$4 trillion in market value.
The California-based firm has, however, become entangled in trade tensions between China and the US, which are waging a heated battle for dominance to produce the chips that power AI.
The US has been restricting which chips Nvidia can export to China on national security grounds.
'Political tariff'
Nvidia said last month that Washington had pledged to let the company sell its H20 chips to China, which are a less powerful version that the tech giant specifically developed for the Chinese market.
The Trump administration had not issued licenses to allow Nvidia to sell the chips before the reported White House meeting.
On Friday, however, the commerce department started granting the licences for chip sales, the reports said.
Silicon Valley-based AMD will also pay 15% of revenue on Chinese sales of its MI308 chips, which it was previously barred from exporting to the country.
The deal could earn the US government more than US$2 billion, according to the New York Times report.
The move comes as the Trump administration has been imposing stiff tariffs, with goals varying from addressing US trade imbalances to wanting to reshore manufacturing to pressuring foreign governments to change policies.
A 100% tariff on many semiconductor imports came into effect last week, with exceptions for tech companies that announce major investments in the US.
'It's a political tariff in everything but name, brokered in the shadow of heightened US-China tech tensions,' Stephen Innes of SPI Asset Management said.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Malay Mail
2 minutes ago
- Malay Mail
Elon Musk accuses Apple of favouring ChatGPT in App Store, plan legal fight
SAN FRANCISCO, Aug 13 — Elon Musk has taken his feud against OpenAI to the App Store, accusing Apple of favoring ChatGPT in the digital shop and vowing legal action. 'Apple is behaving in a manner that makes it impossible for any AI company besides OpenAI to reach #1 in the App Store, which is an unequivocal antitrust violation,' Musk said in a post on his social network X on Monday, without providing evidence to back his claim. 'xAI will take immediate legal action,' he added, referencing his own artificial intelligence company. X users responded by pointing out that DeepSeek AI out of China hit the top spot in the App Store early this year, and Perplexity AI recently ranked number one in the App Store in India. DeepSeek and Perplexity compete with OpenAI and Musk's startup xAI. Both OpenAI and xAI released new versions of their AI assistants, ChatGPT and Grok, in the past week. App Store rankings on Tuesday listed ChatGPT as the top free iPhone app with Grok in fifth place. Apple did not immediately respond to a request for comment. Factors going into App Store rankings include user engagement, reviews, and the number of downloads. OpenAI and Apple in June of last year announced an alliance to enhance iPhones and other devices with ChatGPT features. ChatGPT-5 rolled out free to the nearly 700 million people who use it weekly, OpenAI said in a briefing with journalists last week. Tech industry rivals Amazon, Google, Meta, Microsoft and xAI have been pouring billions of dollars into artificial intelligence since the blockbuster launch of the first version of ChatGPT in late 2022. Chinese startup DeepSeek shook up the AI sector early this year with a model that delivers high performance using less costly chips. OpenAI in April of this year filed counterclaims against multi-billionaire Musk, accusing its former co-founder of waging a 'relentless campaign' to damage the organization after it achieved success without him. In legal documents filed at the time in northern California federal court, OpenAI alleged Musk became hostile toward the company after abandoning it years before its breakthrough achievements with ChatGPT. The lawsuit was another round in a bitter feud between the generative AI (genAI) start-up and the world's richest man, who sued OpenAI last year, accusing the company of betraying its founding mission. In its countersuit, the company alleged Musk 'made it his project to take down OpenAI, and to build a direct competitor that would seize the technological lead -- not for humanity but for Elon Musk.' Musk founded his own genAI startup, xAI, in 2023 to compete with OpenAI and the other major AI players. — AFP
Malay Mail
32 minutes ago
- Malay Mail
US deficit widens to US$291b in July as spending outpaces tariff windfall
WASHINGTON, Aug 13 — The US government's budget deficit grew nearly 20 per cent in July to US$291 billion (RM1.23 trillion) despite a nearly US$21 billion jump in customs duty collections from President Donald Trump's tariffs, with outlays growing faster than receipts, the Treasury Department said on Tuesday. The deficit for July was up 19 per cent, or US$47 billion, from July 2024. Receipts for the month grew 2 per cent, or US$8 billion, to US$338 billion, while outlays jumped 10 per cent, or US$56 billion, to US$630 billion, a record high for the month. The month of July this year had fewer business days than last year, so the Treasury Department said that adjusting for the difference would have increased receipts by about US$20 billion, resulting in a deficit of about US$271 billion. Net customs receipts in July grew to about US$27.7 billion from about US$7.1 billion in the year-earlier period due to higher tariff rates imposed by Trump, a Treasury official said. These collections were largely in line with the increase in June customs receipts after steady growth since April. Trump has touted the billions of dollars flowing into US coffers from his tariffs, but the duties are paid by companies importing the goods, with some costs often passed on to consumers in the form of higher prices. Consumer price index data on Tuesday showed increases in prices for some tariff-sensitive goods like furniture, footwear and auto parts, but they were offset by lower gasoline prices in the overall index. For the first 10 months of the fiscal year, customs duties totalled US$135.7 billion, up US$73 billion, or 116 per cent, from the year-earlier period. US Treasury Secretary Scott Bessent told Fox Business Network's 'Kudlow' programme that the growing US tariff revenue will make it difficult for the Supreme Court to rule against Trump's import taxes if a legal challenge to them makes its way to the country's top court. Ken Matheny, director of macroeconomics Yale University's Budget Lab, said it is unclear how much further monthly tariff revenue will grow, but the applied tariff rate measured by customs duties divided by the value of goods imports is still around 10 per cent, lower than the current average tariff rate of about 18 per cent based on the latest announcements. Significant numbers of firms are likely holding goods in bonded customs warehouses in the hope that negotiations will bring tariff rates down, but at some point those goods will enter the country, triggering duty payments, he said. 'I suspect these numbers are showing us there is a sizable balance of imports where the duties haven't been recognised yet,' Matheny said, adding that this could lead to a 'temporary big surge in duties.' The overall year-to-date budget results showed a US$1.629 trillion deficit, up 7 per cent, or US$112 billion, from the same period a year earlier. Receipts were up 6 per cent, or US$262 billion, to US$4.347 trillion, a record high for the 10-month period, while outlays grew 7 per cent, or US$374 billion, to US$5.975 trillion, also a 10-month record. The year-to-date customs duties were more than eaten up by an increase of 10 per cent or US$141 billion in costs for government healthcare programs, including Medicare for seniors and Medicaid for the poor, to US$1.557 trillion. The Social Security pension programme, the largest single expense item, saw an increase of 9 per cent or US$108 billion over the first 10 months of fiscal 2025 to US$1.368 trillion. Interest on the public debt also continued to grow, topping US$1.01 trillion for the 10-month period, an increase of 6 per cent or US$57 billion over the prior year due to slightly higher interest rates and increased debt levels. — Reuters
Malay Mail
32 minutes ago
- Malay Mail
Homeless in Washington DC risk jail if they defy Trump's crackdown, White House warns
WASHINGTON, Aug 13 — Homeless people in Washington, DC, could face jail time if they do not comply with President Donald Trump's efforts to crack down on crime and rid the US capital of homeless encampments, the White House said on Tuesday. 'Homeless individuals will be given the option to leave their encampment, to be taken to a homeless shelter, to be offered addiction or mental-health services, and if they refuse, they will be susceptible to fines or to jail time,' White House spokeswoman Karoline Leavitt told reporters. Leavitt said the administration was exploring strategies to relocate homeless individuals 'far from the capital.' She said US Park Police have removed 70 homeless encampments from federal parks since March and are set to clear the remaining two encampments in the city later this week. Andy Wassenich, director of policy at Miriam's Kitchen — an organisation offering services to the homeless — said his team was out trying to warn people. He said there was still a lot of confusion about what the crackdown may bring. Their best advice, he said, was: 'Go to shelter if you can, if you can stand it. If you have anybody you can stay with, get off the street, and seek safety and let us know what we can do for you.' Trump said on social media that he wanted the homeless out of Washington even before he announced the extraordinary step of temporarily taking over the District of Columbia's police department and deploying 800 National Guard troops as part of a crackdown on crime there - an effort that also includes another 500 federal law enforcement agents. A billionaire real estate developer, Trump described the homeless as one of several groups who have 'overtaken' Washington that include 'violent gangs and bloodthirsty criminals, roving mobs of wild youth, drugged-out maniacs.' He likened his intended crackdown to his administration's actions to secure the US border with Mexico. Homelessness reached a record high nationwide in 2024 US communities have long experienced seemingly intractable problems with homelessness, which reached an all-time national high of over 771,000 men, women and children on a single night in 2024, according to the Department of Housing and Urban Development's latest homelessness report to Congress. The HUD report estimated Washington's homeless population at 5,616, a 14.1 per cent increase from the year before. That made Washington, a city of just over 700,000 people, the 16th out of the 20 US cities with the largest homeless populations, according to the website USA Facts. The top five cities are New York, Los Angeles, Chicago, Seattle and Denver. But the District of Columbia had the highest prevalence of homelessness among US states, with 83 homeless individuals for every 10,000 people, HUD data showed. Homeless people did not appear to be caught up in a Monday night sweep by 850 officers and federal agents, who the White House said made 23 arrests across the city, an operation which Leavitt announced at a press conference on Monday. The District of Columbia operates under the Home Rule Act, which gives Congress ultimate authority but allows residents to elect a mayor and city council. Trump bypassed the city's elected leaders by declaring a 'public safety emergency' and invoking a section of the act that allows the president to take over the police force for 30 days under emergency conditions. On Sunday night, a small group of federal agents arrived at Union Station — a gathering place for homeless people — and briefly questioned a person standing there, according to a man who was outside the building at the time. After about 15 minutes, the agents, who were from a variety of federal agencies, left with little fanfare. Jacob Adams, a political activist with FLARE USA, a self-described anti-Trump group, was sitting at the organisation's table set up near the fountain outside the station. He said the agents did nothing to disperse the people who had gathered there, and in fact told them they could stay overnight. 'I don't know if it was a show of force or photo ops. But it didn't come off as very forceful,' Adams said. Wassenich said on Tuesday that so far there was little evidence of the unhoused population being directly affected by the surge in law enforcement. 'If they are caught up in other things, that's certainly possible,' he said. 'The tents are still standing. The people are still sleeping on whatever bench they might be on.' — Reuters
