The AI chip race narrative was about U.S. nationwide safety, however apparently now it’s about tariffs: Nvidia and AMD have agreed to pay the U.S. authorities 15% of the income they make from gross sales of high-end AI chips to China in alternate for licenses to promote to these chips within the nation, the Monetary Instances reported, citing nameless sources.
In keeping with the FT’s authorities supply, Nvidia will share revenues from gross sales of its H20 AI chips in China, and AMD would share a reduce of MI308 chip gross sales. The federal government has additionally began issuing licenses for the sale of the 2 firms’ chips, the report mentioned.
The Trump administration in April had restricted gross sales of sure high-performance AI inference chips to China, however paused the ban a few months later, when Nvidia promised to make as much as $500 billion price of knowledge heart investments stateside. Then in July, the corporate mentioned it might resume gross sales of its H20 AI chips to China, which it had designed particularly on the market within the nation following restrictions by the Biden administration.
In keeping with U.S. Commerce Secretary Howard Lutnick, Nvidia’s change in fact was associated to commerce discussions with China concerning rare-earth parts, that are obligatory for making parts, like rechargeable batteries for electrical automobiles.
The administration’s resolution to approve the sale of Nvidia’s H20 chips has its critics: nationwide safety consultants and former authorities officers wrote to Lutnick final month, urging the federal government to reverse course.