Latest news with #export licenses
Tahawul Tech
3 hours ago
- Business
- Tahawul Tech
NVIDIA reach deal with US to restart sale of AI chips to China
NVIDIA and AMD have reached an agreement with the US government that will allow both companies to resume the sale of their AI chips to China. It has been reported that NVIDIA and AMD have been granted export licenses to resume trading in China, but they will pay a 15% levy on the revenue made to the US. In April, US President Donald Trump expressed his dismay that the US was losing some of its technological edge, and announced that companies would need to apply for export licenses. Washington and Beijing have been locked in an economic arm wrestle for years, and now the race for AI-dominance is at the heart of the Trump administration. The US has major national security concerns when it comes to Chinese companies, but the decision to allow NVIDIA and AMD to sell their H20 and MI308 chips will be seen as a surprise by many analysts. Since returning to The Oval Office, US President Donald Trump has launched a war on tariffs and has made no secret of his disdain at the country's tech giants having most of their manufacturing outside of the United States. Last week, Apple pledged another $100bn into manufacturing in the United States, which many believed was done to avoid any future tariffs that the Trump administration should impose. Trump said he wants to see iPhones that are sold in the US, manufactured domestically. Nvidia reconfigured its H100 chip for China after the US introduced export controls in October 2023. At the beginning of the year, there was a huge surge in demand for the H20 chip from Chinese tech players such as Tencent, Alibaba and ByteDance.
Daily Mail
a day ago
- Business
- Daily Mail
US to get 15% of Nvidia and AMD's China sales in new deal
Two American AI companies have agreed to hand over 15 percent of their chip sales revenue in China to the US government in exchange for export licenses, sources have revealed. Nvidia and Advanced Micro Devices (AMD) entered an unprecedented arrangement with the White House to promote and sell their semiconductors in China last week, three people familiar with the situation told the Financial Times. The AI giants secured licensing specifically for Nvidia's H20 and AMD's MI308 chips, both specifically designed to comply with US export restrictions. Trump told Nvidia it could sell the H20 AI chip in China last month after opposing the idea, but he never went through with the licensing to make those sales feasible. Meanwhile, Trump had barred AMD from selling the MI308 chip in China. The CEO of Nvidia, Jensen Huang, met with Donald Trump last week to review the bizarre deal, according to sources, including a US government official. The Commerce Department allegedly started issuing licenses for the semiconductors just two days later. Two of the anonymous sources told the outlet that Trump has not decided what the money will be used for. But the deal could pour more than $2 billion into the US government, The New York Times reported. AMD has not responded to the Financial Times' request for comment, but Nvidia did issue a vague statement on the matter. The $4.4 trillion company wrote: 'We follow rules the US government sets for our participation in worldwide markets.' While AMD CEO Lisa Su (pictured) had not directly addressed the 15 percent revenue agreement, she spoke about the $280 billion company's place in China last week. She told Bloomberg Television that Trump-imposed trade restrictions with China should not deter investors. 'We are seeing a lot of positive signals over the last 90 days in terms of what the market needs from computing,' she told the outlet. 'We have a number of licenses under review, and we've been given good indications those are moving through the process.' Just as sources say Trump and the AI companies entered the agreement, the president declared he would impose a 100 percent tariff on the imports of semiconductors and chips unless the company is 'building in the United States.' Amid Trump's tariff crackdown, he has been issuing hefty tariffs on other countries - with China facing the majority of the brunt - to encourage domestic production. News of Trump's discreetly entered agreement with Nvidia and AMD has been slammed by experts who say the move could have detrimental repercussions when it comes to US-China relations. 'This is an own goal and will incentivize the Chinese to up their game and pressure the administration for more concessions,' Liza Tobin, who previously served as China director at the National Security Council, told The New York Times. 'This is the Trump playbook applied in exactly the wrong domain. You're selling our national security for corporate profits.' The move to sell microchips to China has been heavily criticized, as many see it as a threat to national security and a move against America's best interests. US security experts said the H20 in particular will aid the Chinese military efforts and boast China in its AI development race against the US. Nvidia's devices are generally regarded as better quality than those of its Chinese-made counterpart, Huawei. But the Trump administration has said it will not allow China to purchase Nvidia's most powerful chips. The H20 chip was approved under the Biden administration and lacks the capabilities of chips sold within the US and to allied nations. 'We don't sell them our best stuff, not our second-best stuff, not even our third best,' Howard Lutnick, the Commerce Secretary, told CNBC last month. Huang convinced Trump to let up on his previously established boundaries by arguing that not allowing American companies to compete in the Chinese market would be harmful to the US, according to The New York Times. 'The American tech stack should be the global standard, just as the American dollar is the standard by which every country builds on,' Huang said last month during a podcast with think tank the Special Competitive Studies Project. Despite these massive wins for Nvidia and AMD, the Chinese government has actually warned citizens that the H20 has security risks. The Cyberspace Administration of China summoned Huang over possible 'backdoor security risks' with the H20. 'There is no such thing as a 'good' secret backdoor — only dangerous vulnerabilities that need to be eliminated,' Nvidia disputed in a blog post.
Irish Times
a day 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
Japan Times
a day ago
- Business
- Japan Times
Nvidia and AMD to pay U.S. 15% of China chip revenue, says report
Nvidia and AMD 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, the Financial Times reported Sunday. The paper cited a US official as saying that Nvidia would share 15% 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 licenses on Friday, two days after Nvidia Chief Executive Cfficer Jensen Huang met 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 didn't respond to the paper's request for comment. Separately, Intel Chief Executive Officer Lip-Bu Tan is expected to visit the White House on Monday after Trump called for his dismissal last week over his ties to Chinese businesses, the Wall Street Journal reported Sunday.
Daily Mail
a day ago
- Business
- Daily Mail
AI companies Nvidia and AMD to pay 15% of China chip sales revenues to US
Two American AI companies have agreed to hand over 15 percent of their chip sales revenue in China to the US government in exchange for export licenses, sources have revealed. Nvidia and Advanced Micro Devices (AMD) entered an unprecedented arrangement with the White House to promote and sell their semiconductors in China last week, three people familiar with the situation told the Financial Times. The AI giants secured licensing specifically for Nvidia's H20 and AMD's MI308 chips, both specifically designed to comply with US export restrictions. Trump told Nvidia it could sell the H20 AI chip in China last month after opposing the idea, but he never went through with the licensing to make those sales feasible. Meanwhile, Trump had barred AMD from selling the MI308 chip in China. The CEO of Nvidia, Jensen Huang, met with Donald Trump last week to review the bizarre deal, according to sources, including a US government official. The Commerce Department allegedly started issuing licenses for the semiconductors just two days later. Two of the anonymous sources told the outlet that Trump has not decided what the money will be used for. But the deal could pour more than $2 billion into the US government, The New York Times reported. AMD has not responded to the Financial Times' request for comment, but Nvidia did issue a vague statement on the matter. The $4.4 trillion company wrote: 'We follow rules the US government sets for our participation in worldwide markets.' While AMD CEO Lisa Su had not directly addressed the 15 percent revenue agreement, she spoke about the $280 billion company's place in China last week. She told Bloomberg Television that Trump-imposed trade restrictions with China should not deter investors. 'We are seeing a lot of positive signals over the last 90 days in terms of what the market needs from computing,' she told the outlet. 'We have a number of licenses under review, and we've been given good indications those are moving through the process.' Just as sources say Trump and the AI companies entered the agreement, the president declared he would impose a 100 percent tariff on the imports of semiconductors and chips unless the company is ' building in the United States.' Amid Trump's tariff crackdown, he has been issuing hefty tariffs on other countries - with China facing the majority of the brunt - to encourage domestic production. News of Trump's discreetly entered agreement with Nvidia and AMD has been slammed by experts who say the move could have detrimental repercussions when it comes to US-China relations. 'This is an own goal and will incentivize the Chinese to up their game and pressure the administration for more concessions,' Liza Tobin, who previously served as China director at the National Security Council, told The New York Times. 'This is the Trump playbook applied in exactly the wrong domain. You're selling our national security for corporate profits.' The move to sell microchips to China has been heavily criticized, as many see it as a threat to national security and a move against America's best interests. US security experts said the H20 in particular will aid the Chinese military efforts and boast China in its AI development race against the US. Nvidia's devices are generally regarded as better quality than those of its Chinese-made counterpart, Huawei. But the Trump administration has said it will not allow China to purchase Nvidia's most powerful chips. The H20 chip was approved under the Biden administration and lacks the capabilities of chips sold within the US and to allied nations. 'We don't sell them our best stuff, not our second-best stuff, not even our third best,' Howard Lutnick, the Commerce Secretary, told CNBC last month. Huang convinced Trump to let up on his previously established boundaries by arguing that not allowing American companies to compete in the Chinese market would be harmful to the US, according to The New York Times. 'The American tech stack should be the global standard, just as the American dollar is the standard by which every country builds on,' Huang said last month during a podcast with think tank the Special Competitive Studies Project. Despite these massive wins for Nvidia and AMD, the Chinese government has actually warned citizens that the H20 has security risks. The Cyberspace Administration of China summoned Huang over possible 'backdoor security risks' with the H20. 'There is no such thing as a 'good' secret backdoor — only dangerous vulnerabilities that need to be eliminated,' Nvidia disputed in a blog post.
