U.S. President Donald Trump has approved a deal enabling Nvidia to resume sales of its H20 AI chips to China contingent upon a 15% revenue share to the U.S. government.
Trump's Deal Approval
The agreement also includes AMD and marks a rare instance where U.S. export controls are linked to financial payments. The decision overturns a previous ban and introduces a new dimension to U.S. national security policy, where access to restricted technology can come with a price tag. Trump also mentioned considering allowing Nvidia to sell a reduced-performance version of its high-end Blackwell chips to China.
Lawmakers' Reaction
Both Republican and Democratic lawmakers in Congress criticized the move, warning it establishes a "pay-for-play" system for sensitive technology exports. John Moolenaar, chair of the House Select Committee on China, stated that export controls protect national security and "we should not set a precedent that incentivizes the government to grant licenses to sell China technology that will enhance its AI capabilities." Raja Krishnamoorthi, the committee's top Democrat, added that charging a fee suggests that "American national security principles are negotiable for the right fee."
Legal and Financial Implications
The legality of Trump's revenue-sharing arrangement is unclear. The U.S. Constitution prohibits Congress from imposing taxes or duties on exports. Trade lawyer Jeremy Iloulian remarked that it’s difficult to ascertain whether the payment constitutes an export tax without more specifics. Analysts have warned that this levy could shrink profit margins on processors bound for China by 5 to 15 percentage points, thereby affecting Nvidia and AMD's overall margins.
In summary, Trump's new approach may reshape the management of technology exports, raising concerns among lawmakers and analysts about the potential impacts on national security and the financial stability of companies.
