Most valuable company in the world, the Nvidia He finds himself in the midst of Donald Trump’s historic trade war with China. The result: an extraordinary concession of a corporation of US $ 4.5 trillion that will give the United States a percentage of each high performance artificial intelligence chip sold to the Chinese.
The agreement, that the AMD It has also signed for some of its chips, it can balance two trump management objectives: keeping US dominance in AI while ensuring a trade agreement with China.
The deal can still guarantee the White House billion dollars to spend as you wish.
What about the agreement?
Nvidia and AMD agreed to China in exchange for licenses to export their technology there.
The White House in April blocked the export of certain AI chips to China, including NVIDIA and MI308 H20 chips from AMD.
The agreement with the Trump administration allows companies to obtain export licenses to resume sales of these chips in China, an US employee told CNN International. O Financial Times He was the first to report the story on Sunday (10).
Nvidia anticipated the agreement last month when she said she would resume sales from the H20 chip to China after the government demonstrates openness to allow the export of certain AI chips again.
But the payment of 15% was a surprise. Trump said he was initially asked Nvidia to pay 20%, but they negotiated the fee to 15%.
The agreement was closed after the company’s CEO, Jensen Huang, meet with the president of the United States on Wednesday (6), the official said. Although export licenses have been granted on Friday (8), no shipping has yet been made.
“We follow the rules that the US government establishes for our participation in world markets,” said a NVIDIA spokesman in a statement.
“Although we have not sent H20 to China for months, we hope that export control rules will allow America to comply in China and worldwide.”
How extraordinary is this?
Governments, including the United States, have taken control of companies in the past when they were considered strategic for national security.
During the financial crisis in 2009, the United States took control of General Motors and Chrysler, and the income of these appearances went directly to the US Treasury after the government sold them with profit.
But it is unclear whether the US government has already required a percentage of a company’s business without taking action – or if it is even legal.
The US Constitution prohibits export taxes. To circumvent this, the terms of the agreement were structured as a voluntary agreement, so that it is not considered a tax or tariff, said one employee.
Instead, Nvidia and AMD will voluntarily send funds to the US government. Companies will have no influence on how the government will use this money after shipping.
“It is difficult to identify any historical precedent for this kind of agreement,” said Sarah Kreps, professor of law and director of the Institute of Technological Policy at Brooks School of Public Policy at Cornell University.
And national security?
In recent years, the US government has sought to restrict China’s access to advanced US technology in an effort to slow down and allow the United States to stay at the top.
But the reversal of the White House in export controls may be a recognition that, so US companies may well be allowed to benefit.
This can also give the US another way to increase revenue for the government ,.
“It seems that there was some vacillation within management over and in relation to China, and I think this reflects the internal division within the administration between the hawks of China and the economic pragmatics,” said Kreps. “It seems that, increasingly, economic pragmatics are prevailing.”
This approach would be alied with Nvidia’s Huang arguments, which has said that restricting AI chips sales is bad for US national security.
Chinese developers could simply undermine US leadership by creating their own alternatives if they can’t buy technology from the country, according to Huang, who has repeatedly met with Trump in recent months.
The White House agrees with the CEO, believing that it is better to have China linked to a US-made chip sold by legitimate channels than forcing it to the black market, a government official said. Chinese have been able to subvert existing channels to get restricted chips anyway.
Why is Trump charging 15%?
Big questions remain on where the idea of the 15% commission came about and what this could mean for national security.
A government official said the payment allows management to maintain the export process and generate revenue for the White House in the process.
Still, it is unclear whether the penalty for Nvidia and AMD will effectively limit the flow of chips or will eliminate any possible national security issues.
“If there is a legitimate concern of national security about exporting these chips to China, then I don’t see how payments to the US government resolve these risks. In fact, they don’t solve at all,” said Scott Kennedy, senior consultant and chairman of the Chinese business and economy board at CSIS (Center for Strategic and International Studies).
“And if there is not sufficient risk to national security or if they can be properly mitigated […] So the US government should simply get out of the way and expect nothing in return. “
What does this mean to Nvidia?
Nvidia launched the H20 chip last year as a way to maintain access to the Chinese market – which represented 13% of the company’s sales in 2024 – against.
But it is believed that an advanced Chinese Ia model that after its launch earlier this year ,.
After the Trump administration banned H20 sales to China in April due to export controls in the first quarter and projected a similar result in the second quarter.
So even if you have to pass 15% of these sales to the White House, resuming H20 shipments to China could mean more dollar billions in revenue for Nvidia – which became the first publicly traded company to exceed US $ 4 trillion in market value last month.
Nvidia’s shares rose up to 0.5% on Monday (11).
What is the importance of these chips?
On Monday (11), Trump called Nvidia’s H20 chip “obsolete”, saying that China “already has it in a different form.”
“These H20s are still a state of art,” said Kennedy from CSIS. Although less advanced, in some ways, than other Nvidia chips, “they also come with elements that make them extremely sophisticated and valuable,” including their memory capacities.
“I think suggestions that they are obsolete underestimate the value to the user,” he said.
Nvidia probably considered that there is sufficient Chinese demand for chips to make the 15% White House committee a valid compensation for its business, according to Kreps.
“You have to make a calculation based on what was lost with export controls,” she said.
Will Trump approve more advanced chips?
On Monday, Trump left the possibility of Nvidia to export her high performance Blackwell chips for a higher price.
Republican administration had closed the doors to export this technology to China – even after reversing the course on the H20.
However, Trump said he would consider it to allow Nvidia to sell the Blackwell chip.
“Blackwell is over -timely. Although it is possible,” said Trump. “I would make a slightly negatively enhanced agreement. Blackwell, in other words, taking 30% to 50% of it, but this is the last and best in the world. No one has it. They won’t have for five years.”
Trump said Huang will return to the White House in the future to discuss the sale of a “unscreased” version of Blackwell.
“I think he will come to see me again about it, but it will be an undereated version of the great,” said Trump. “You know, sometimes we sell hunting aircraft to a country and give them 20% less than we have.”
What does China want?
Beijing’s questions about the safety of American AI chips also raise uncertainties about how successful Trump’s commission policy could be.
China may choose not to buy the H20 chips from the American company Nvidia, the Yuyuan Tantian social media account, which is affiliated with state broadcaster CCTV, said on Sunday.
She claimed that the chips could have “backdoors” that affect their function and safety, following previous similar allegations of China’s cybersecurity administration.
NVIDIA has repeatedly denied that its products have backdoors.
However, this statement may be less indication that China will not buy American chips and one more signal for Chinese technology companies to continue innovating in semiconductors, even if US shipments are resumed, Kennedy said.
What does this mean to a broader trade agreement?
For Trump administration, cost-effective analysis indicates that this opens the flow of medium-sized chips to China, while providing management with an important exchange chip in ongoing trade negotiations, a US employee said.
Treasury Secretary Scott Bessent has classified Nvidia’s export controls as a “negotiating coin” in the broader commercial discussions between US and China.
But China is aware of it, and its position on supposed security concerns about the H20 chip this weekend suggests that it will not be convinced so easily – even if you want chips for your market.
