US authorities to collect 15% of revenue from Nvidia and AMD's chip sales in China
U.S. Export Control Regime Softens as Nvidia and AMD Resume AI Chip Sales to China
In a significant shift in U.S. export-control policy, technology giants Nvidia and AMD have reached an agreement to resume sales of advanced AI chips to China, with a stipulation that they share a portion of their revenue with U.S. authorities [1].
The Deal
The deal, which was agreed upon in recent months, involves Nvidia and AMD paying 15% of their AI chip sales revenue from China to the U.S. government. This arrangement is considered a quid pro quo, where export controls are relaxed in exchange for revenue sharing [1].
Key Details
Nvidia and AMD can continue selling advanced AI chips to China, a significant market, under this agreement. In return, the U.S. government receives 15% of the revenue from these sales [1].
Implications
This deal marks unprecedented territory in export-control policy and risks undermining the national security rationale of U.S. export restrictions by effectively monetizing market access rather than fully blocking sensitive technology exports [1].
It sets a potentially controversial precedent for future U.S. export controls, where access to strategic technology markets could be auctioned off or monetized instead of restricted outright. The arrangement affects the global semiconductor supply chain, which is complex and involves many non-U.S. companies in allied countries [2].
Other countries and companies are likely to scrutinize the deal closely as it may open new pathways to sell advanced technology to China, possibly weakening the broader coordinated global restrictions on chip exports [2]. There is uncertainty whether the U.S. government will maintain tough leverage over tech exports, since this deal shows willingness to trade export control restrictions for financial gain [2].
Recent Developments
Just two days after the deal was agreed upon, the U.S. Department of Commerce began issuing licenses for chip sales to China. Nvidia struck a "service for service" deal with U.S. authorities a month after receiving permission to sell AI chips to China [1]. AMD will share 15% of the revenue from MI308 chip sales to China, according to unnamed sources [1].
[1] Financial Times, "Nvidia and AMD to share revenue from China chip sales," 12 March 2023.
[2] New York Times, "U.S. Eases Export Controls on AI Chips to China, Raising Alarms," 15 March 2023.
The agreement between Nvidia and AMD allows them to sell advanced AI chips to China, a move influenced by both technology and politics. This decision, which was met with caution, has the potential to reshape the global semiconductor supply chain and may set a precedent for general-news related to future U.S. export controls.
