Under new, unusual agreement, U.S. will get a 15% cut of Nvidia and AMD chip sales to China

U.S. to Gain 15% Cut from Nvidia and AMD China Chip Sales

What’s Happening?

In a groundbreaking agreement, U.S. chip giants Nvidia and AMD have agreed to share 15% of their revenues from sales of advanced semiconductors to China with the U.S. government. This deal comes after recent export restrictions and is set to allow the companies to resume sales of key chip models to China.

Where Is It Happening?

The agreement impacts global semiconductor sales, particularly affecting the U.S. and China, with the revenue-sharing directly benefiting the U.S. government.

When Did It Take Place?

The export restrictions were imposed in April, but the details of the revenue-sharing agreement emerged in July.

How Is It Unfolding?

– The U.S. government suspended sales of advanced AI chips to China in April.
– Nvidia and AMD negotiated a deal to resume sales of the H20 and MI308 chips.
– A 15% revenue share from future sales will go to the U.S. government.
– The move aims to balance national security concerns with economic interests.

Quick Breakdown

– Companies: Nvidia, AMD
– Affected Products: H20, MI308 chips
– Revenue Share: 15% to the U.S. government
– Purpose: Secure export licenses for advanced semiconductors to China

Key Takeaways

This agreement marks a unique compromise where U.S. chipmakers facilitate trade with China while also ensuring some financial benefit to the American government. It underlines the complex geopolitical tensions surrounding semiconductor technology, which is critical for both economic and national security interests. The deal allows both sides to mitigate losses from the earlier export ban while addressing U.S. concerns about technological dominance.

The revenue-sharing agreement is a creative solution, but critics may question whether it sets a dangerous precedent for future tech trade negotiations. It’s a delicate balance between economic growth and national security.
– Linda Chen, Professor of International Trade

Final Thought

This unprecedented deal highlights the delicate balance between economic interests and national security in the tech industry. By allowing Nvidia and AMD to sell advanced chips to China while securing a revenue share for the U.S., the agreement may ease tensions but also raises questions about future trade policies. The world is watching to see how this model unfolds and whether it becomes a standard for tech trade.

Source & Credit: https://www.pbs.org/newshour/politics/under-new-unusual-agreement-u-s-will-get-a-15-cut-of-nvidia-and-amd-chip-sales-to-china