Business with 2degrees - Donald Trump confirms gold will avoid tariffs and announces a new business deal with Nvidia. Video / Herald NOW
President Donald Trump has confirmed reports that semiconductor giant Nvidia would pay the United States 15% of its revenues from sales of certain artificial intelligence chips to China.
Trump argued that Nvidia’s “H20” chips were “obsolete”, despite previously being targeted for export restrictions.
He said that to lift the restrictions,he had agreed to a 15% cut from Nvidia: “If I’m going to do that, I want you to pay us as a country something, because I’m giving you a release. I released them only from the H20.”
The California-based company produces some of the world’s most advanced semiconductors but cannot ship its most cutting-edge chips to China because of concerns that Beijing could use them to enhance military capabilities.
Nvidia developed the H20 – a less powerful version of its AI processing units – specifically for export to China.
That plan stalled when the Trump administration tightened export licensing requirements in April.
Nvidia is the world's most valuable company. Photo / Getty Images
Nvidia CEO Jensen Huang met Trump at the White House last week 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.
“While we haven’t shipped H20 to China for months, we hope export control rules will let America compete in China and worldwide,” a Nvidia spokesperson told AFP.
The company spokesperson added: “America cannot repeat 5G and lose telecommunication leadership. America’s AI tech stack can be the world’s standard if we race.”
Investors are betting that AI will transform the global economy, and last month Nvidia – the world’s most valuable company and a leading designer of high-end AI chips – became the first company to hit $4 trillion in market value.
The firm has, however, become entangled in trade tensions between China and the US, which are waging a heated battle for dominance to produce the chips that power AI.
‘Political tariff’
The United States has been restricting which chips Nvidia can export to China on national security grounds.
After Huang’s meeting with Trump, the Commerce Department on Friday started granting the licences for chip sales, according to media reports.
Silicon Valley-based AMD will also pay 15% of revenue on Chinese sales of its MI308 chips, which it was previously barred from exporting to the country.
AMD did not respond to requests for comment.
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% tariff on many semiconductor imports came into effect last week, with exceptions for tech companies that announce major investments in the United States.
“It’s a political tariff in everything but name, brokered in the shadow of heightened US-China tech tensions,” Stephen Innes of SPI Asset Management said.
