China, US Step Back from Decoupling Brink, Slash Tariffs
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CNBC
23 minutes ago
- CNBC
Trump says he asked for 20% cut from Nvidia, calls H20 an 'obsolete' chip
President Donald Trump on Monday said that he initially asked Nvidia for a 20% cut of the chipmaker's sales to China, but the number came down to 15% after CEO Jensen Huang negotiated with him. 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.
23 minutes ago
What to know about the Trump administration's deal with AI chipmakers
AI chipmakers Nvidia and Advanced Micro Devices struck an extraordinary accord to pay the United States government 15% of the revenue the two companies are set to make from products sold in China, a White House official confirmed to ABC News. In exchange for the payment, the Trump administration will grant the companies export licenses for the AI chips, allowing the firms to tap into a large market in China. The quid quo pro agreement between major corporations and the president holds little or no precedent. The Financial Times first reported the deal. Speaking to reporters at the White House on Monday, Trump recounted the agreement with Nvidia. "I said, 'If I'm going to do that, I want you to pay us as a country something, because I'm giving you a release,'" Trump said. Here's what to know about the deal reached between Nvidia, AMD and the Trump administration. Trump green-lights AI chip exports to China In recent years, Santa Clara, Calif.-based Nvidia has grown into one of the world's largest companies as its advanced chips have fueled the rapid development of chatbots and other AI tools. The company said last month that the Trump administration had granted the company permission to sell its H20 chip, a product specifically designed for sale to China. Nvidia developed the chip in compliance with export restrictions put in place by the Biden administration beginning in 2022. Despite the Trump administration's apparent green light last month, Nvidia did not receive licenses for chip exports to China over the ensuing weeks. The deal recently struck between the Trump administration and Nvidia will allow the company to obtain the export licenses and begin the sale of chips in China, a White House official said. AMD, which offers an MI308 chip for Chinese customers, will also receive permission for such sales, the official added. Some observers have opposed the sale of advanced AI chips in China, saying the technology would help the country keep up with the U.S. in the fast-growing AI industry. The Trump administration has previously challenged the view, describing Nvidia's H20 chip as inferior to similar products sold in the U.S. 'We don't sell them our best stuff, not our second best stuff, not even our third best,' Commerce Secretary Howard Lutnick told CNBC last month, referring to Nvidia's H20 chip as its 'fourth best.' In a statement to ABC News, Nvidia did not directly comment on the terms of the agreement. "We follow rules the U.S. government sets for our participation in worldwide markets," Nvidia said. "While we haven't shipped H20 to China for months, we hope export control rules will let America compete in China and worldwide. 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 ABC News' request for comment. Chipmakers pay share of revenue to U.S. government In exchange for approval of chip sales in China, Nvidia and AMD have agreed to pay the U.S. 15% of revenue derived from such business. The move marks the Trump administration's latest intervention in the affairs of an individual company. When Japan-based Nippon Steel acquired U.S. Steel in June, the Trump administration received a "golden share" that affords the White House significant influence over the company. The golden share allows the Trump administration to influence the makeup of the company's board and assert veto power over a host of major decisions, though the White House does not retain a financial stake in the firm. More recently, Trump last week called on the CEO of Intel, Lip-Bu Tan, to resign. In a message posted on social media, Trump accused Tan of being "HIGHLY conflicted." Trump did not explain why Tan should resign, nor did he provide evidence for his allegation of a conflict of interest. But the post came after Republican Sen. Tom Cotton raised concerns about Tan's alleged ties to China. Tan is still the company's CEO.
Newsweek
23 minutes ago
- Newsweek
Donald Trump's Chip Revenue Deal Comes Under Scrutiny
Based on facts, either observed and verified firsthand by the reporter, or reported and verified from knowledgeable sources. Newsweek AI is in beta. Translations may contain inaccuracies—please refer to the original content. American chipmakers Nvidia and Advanced Micro Devices have agreed to give 15 percent of revenue from certain artificial intelligence chip sales in China to the U.S. government as a condition of obtaining export licenses. The arrangement ties government permission to a revenue-sharing requirement, prompting questions about constitutionality and the purpose of export controls amid a high-stakes rivalry with China for AI computing capacity. Newsweek contacted the White House for more information on the deal via email. Why it Matters The deal alters a long-standing norm that U.S. export controls serve national security ends rather than revenue generation, potentially setting a precedent for monetizing access to foreign markets and complicating the legal framework governing exports. Critics have flagged legal issues, citing the Constitution's prohibition on export taxes and arguing that the arrangement blurs the line over national security controls. What To Know Nvidia and AMD had sought licenses to resume sales of high-performance AI chips to Chinese customers after previous restrictions had limited exports, with the chips named as Nvidia's H20 and AMD's MI308. However, the White House gave Nvidia the all-clear in July to resume sales with China. Nvidia founder and CEO Jensen Huang said on July 14 the U.S. government had assured him it would restore the licenses to sell H20s in China. "General purpose, open-source research and foundation models are the backbone of AI innovation," said Huang. "We believe that every civil model should run best on the U.S. technology stack, encouraging nations worldwide to choose America." President Donald Trump listens to questions from reporters after speaking on economic data in the Oval Office on August 07, 2025 in Washington, DC. President Donald Trump listens to questions from reporters after speaking on economic data in the Oval Office on August 07, 2025 in Washington, DC. Getty Images Now though, the all clear has been revealed to be conditional on the U.S. receiving 15 percent of the revenue from sales of artificial intelligence chips in China, according to reports from the Washington Post. Legal experts and former officials said the deal was highly unusual and could invite judicial challenges or congressional oversight. Peter Harrell, the White House's senior director for international economics under the Biden administration, said on social media: "In addition to the policy problems with just charging Nvidia and AMD a 15 percent share of revenues to sell advanced chips in China, the US Constitution flatly forbids export taxes. "In addition to the Constitution, 50 USC 4815(c) expressly prohibits fees for export control licenses. 'Fees-No fee may be charged in connection with the submission, processing, or consideration of any application for a license...' This is from the 2018 Export Control Reform Act." What People Are Saying Stephen Olson, former U.S. trade negotiator, told Bloomberg: "What we are seeing is in effect the monetization of US trade policy in which US companies must pay the US government for permission to export. If that's the case, we've entered into a new and dangerous world." A spokesperson for Nvidia, quoted in The Washington Post on Aug. 10, 2025, said: "We follow rules the U.S. government sets for our participation in worldwide markets. While we haven't shipped H20 to China for months, we hope export control rules will let America compete in China and worldwide." Alexandra Mousavizadeh, CEO of Evident and creator of the Global AI Index, previously told Newsweek that there were two different approaches to China's AI development: "You can continue to try and contain access to chips and close the walls off. While you're doing that, you're doubling down on investment into data infrastructure, supporting the development of AI in the U.S. and being first in that race, "Or you open up completely and you say, 'Look, it's to the benefit of all that everyone has access to everything, because the collaboration between Europe, the U.S. and China in the past has been what has led to the ability to get to where we are today.' What Happens Next The arrangement could prompt legal action from those arguing the revenue-sharing arrangement functions as an impermissible export tax, while Congress could open hearings to examine the administration's role and the terms of the licenses.
