Latest news with #Advanced Micro Devices
France 24
2 hours ago
- Business
- France 24
Nvidia, AMD agree to pay US 15% of revenue from sales of AI chips to China
US semiconductor giants Nvidia and Advanced Micro Devices have agreed to pay the United States government 15 percent 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 New York Times. AFP was not able to immediately verify the reports. Nvidia hits milestone of $4 trillion market value 01:43 Investors are betting that AI will transform the global economy, and last month Nvidia – the world's leading semiconductor producer – became the first company ever to hit $4 trillion in market value. The California-based firm has, however, become entangled in trade tensions between China and the United States, 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. Nvidia said last month that Washington had pledged to let the company sell its 'H20' chips to China, which are a less powerful version 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 licenses for chip sales, the reports said. Silicon Valley-based Advanced Micro Devices (AMD) will also pay 15 percent 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 $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, wanting to reshore manufacturing and pressuring foreign governments to change policies. A 100 percent tariff on many semiconductor imports came into effect last week, with exceptions for tech companies that announce major investments in the United States.
Irish Times
2 hours ago
- Business
- Irish Times
Nvidia and AMD to pay US 15% of China AI chip sales
Nvidia and Advanced Micro Devices agreed to pay 15 per cent of their revenues from Chinese AI chip sales to the US government in a deal to secure export licenses, an unusual arrangement that may unnerve both US companies and Beijing. Nvidia plans to share 15 per cent of the revenue from sales of its H20 AI accelerator in China, according to a person familiar with the matter. AMD will deliver the same share from MI308 revenues, the person added, asking for anonymity to discuss internal deliberations. The arrangement reflects US president Donald Trump's consistent effort to engineer a financial pay-out for America in return for concessions on trade. His administration has shown a willingness to relax trade conditions like tariffs in return for giant investment in the US – as with Apple Inc.'s pledge to spend $600 billion (€514 billion) on domestic manufacturing. But such a narrow, select export tax has little precedent in modern corporate history. READ MORE Beijing, which has grown increasingly hostile to the idea of Chinese firms deploying the H20, is unlikely to warm to the idea of a chip tax. Yuyuantantian, a social media account affiliated with state-run China Central Television that regularly signals Beijing's thinking about trade, on Sunday slammed the chip's supposed security vulnerabilities and inefficiency. 'This seeming quid pro quo is unprecedented from an export control perspective. The arrangement risks invalidating the national security rationale for US export controls,' said Jacob Feldgoise, a researcher at the DC-based Centre for Security and Emerging Technology. It 'will likely undermine the US' position when negotiating with allies to implement complementary controls,' he added. 'Allies may not believe US policymakers if they are willing to trade away those same national security concerns for economic concessions – either from US companies or foreign governments.' An Nvidia spokesperson said the company follows US export rules, adding that while it hasn't shipped H20 chips to China for months, it hopes the rules will allow US companies to compete in China. AMD didn't immediately respond to a request for comment. The Financial Times earlier reported the development. It followed a separate report from the same outlet that the Commerce Department had begun issuing H20 licenses last week, days after Nvidia chief executive Jensen Huang met with Trump. Huang has lobbied long and hard for the lifting of restrictions, arguing that walling China off will only slow the spread of American technology and encourage local rivals such as Huawei Technologies. 'It's a strategic bargaining chip' that tightens Washington's grip on a critical tech sphere during trade negotiations with China, said Hebe Chen, an analyst with Vantage Markets in Melbourne. 'Over time, this hurdle for chips entering China will likely deter Nvidia and AMD from deeper expansion in the world's largest chip-importing market, while giving local Chinese producers a clear edge to capture market share and accelerate domestic semiconductor innovation.' If Washington goes ahead with the tax, it should funnel some capital to the US – but not an enormous amount in relative terms. Both Nvidia and AMD have said it'll take time to ramp back up production of their China-specific products – even if order levels return to previous levels, which is uncertain. Nvidia raked in $4.6 billion of revenue from the H20 in the fiscal quarter ended April 27 – days after new restrictions on shipping the AI accelerator to China were imposed. It also said it had been unable to ship $2.5 billion of H20 China revenue in that period because of the new rules. That implies it would have got more than $7 billion in H20 sales to China during the period. If it can return to that level, the US government will stand to get about a billion dollars a quarter from its deal. AMD could generate $3 billion to $5 billion of 2025 revenue if restrictions were lifted, Morgan Stanley estimates. Chinese alternatives such as Huawei's Ascend chips now account for 20 per cent to 30 per cent of domestic demand, it reckoned. 'The US government clearly needs the money given its deficits and eagerness to collect tariffs,' said Vey-Sern Ling, managing director at Union Bancaire Privee in Singapore. 'But the complication is China's accusations about H20 chips containing backdoors, which could be a negotiation tactic to highlight that the country is not 'hard up' for US chips.' – Bloomberg
Yahoo
8 hours ago
- Business
- Yahoo
Nvidia to Pay US 15% of China Chip Sale Revenue
Nvidia Corp. and Advanced Micro Devices Inc. agreed to pay 15% of their revenues from chip sales to China to the US government as part of a deal with the Trump administration to secure export licenses, according to a person familiar with the matter. Bloomberg's Minmin Low breaks down what we know so far. Sign in to access your portfolio
Bloomberg
8 hours ago
- Business
- Bloomberg
Nvidia to Pay US 15% of China Chip Sale Revenue
Nvidia Corp. and Advanced Micro Devices Inc. agreed to pay 15% of their revenues from chip sales to China to the US government as part of a deal with the Trump administration to secure export licenses, according to a person familiar with the matter. Bloomberg's Minmin Low breaks down what we know so far. (Source: Bloomberg)
South China Morning Post
12 hours ago
- Automotive
- South China Morning Post
Nvidia, AMD to pay 15% of China chip sale income to US, Financial Times reports
Nvidia and Advanced Micro Devices agreed to pay 15 per cent of their revenues from chip sales to China to the US government as part of a deal with the Trump administration to secure export licences, the Financial Times reported on Sunday. The newspaper cited a US official as saying that Nvidia would share 15 per cent of the revenue from sales of its H20 chip in China and AMD will deliver the same share from MI308 revenues. It followed an earlier report from the paper that the Commerce Department started issuing H20 licences on Friday, two days after Nvidia Chief Executive Cfficer Jensen Huang met US President Donald Trump The Trump administration had frozen the sale of some advanced chips to China earlier this year as trade tensions spiked between the world's two largest economies. Nvidia told the Financial Times that it follows US export rules, while AMD did not respond to the newspaper's request for comment.
