Nvidia and AMD to Pay US 15% of China Chip Sales in Historic Deal
In an unusual agreement, US tech giants Nvidia and AMD have consented to hand over 15% of their revenues from chip sales in China to the US government. This move comes amidst ongoing US-China trade discussions and export control debates over Nvidia stock and AMD stock.
The arrangement was facilitated following a meeting between Nvidia CEO Jensen Huang and former President Donald Trump. Shortly after, the US commerce department began issuing H20 export licences for Nvda stock and Nasdaq Nvda. Initially, the Trump administration had imposed an H20 export ban to China in April, but this was reversed in June post Huang's meeting.
Nvidia and AMD's agreement is unprecedented. They will contribute 15% of their revenues from H20 and MI308 chip sales in China, respectively. This is the first time a US company has agreed to pay a portion of their revenues in exchange for export licences for Nvidia stock and AMD stock. The commerce department has been instructed to halt new export controls on China to avoid straining relations with Beijing.
The ongoing debate in Washington regarding export control policies for chips coincides with US-China trade discussions. Trump hopes these discussions will lead to a summit with President Xi Jinping. However, the Trump administration has yet to decide how Nvidia and AMD's contributions will be utilised for Nvidia stock and AMD stock.
Nvidia and AMD's agreement to pay 15% of their revenues from chip sales in China to the US government is a significant development in US-China trade relations. While the funds' utilisation remains undecided, this arrangement signals a shift in US export control policies, with potential implications for future trade discussions over Nvidia stock and AMD stock.
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