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Nvidia and AMD To Pay 15% of China Chip Sale Revenues To US Government (apnews.com) 61

Posted by BeauHD from the pay-to-play dept.
In an unusual arrangement to secure export licenses, Nvidia and AMD have agreed to give the U.S. government 15% of revenue from certain chip sales to China. The Associated Press reports: The Trump administration halted the sale of advanced computer chips to China in April over national security concerns, but Nvidia and AMD revealed in July that Washington would allow them to resume sales of the H20 and MI308 chips, which are used in artificial intelligence development. President Trump confirmed the terms of the unusual arrangement in a Monday press conference while noting that he originally wanted 20% of the sales revenue when Nvidia asked to sell the "obsolete" H20 chip to China. The president credited Nvidia CEO Jensen Huang for negotiating him down to 15%. "So we negotiated a little deal. So he's selling a essentially old chip," Trump said.

Nvidia did not comment about the specific details of the agreement or its quid pro quo nature, but said they would adhere to the export rules laid out by the administration. "We follow rules the U.S. government sets for our participation in worldwide markets. While we haven't shipped H20 to China for months, we hope export control rules will let America compete in China and worldwide," Nvidia wrote in a statement to the AP. "America cannot repeat 5G and lose telecommunication leadership. America's AI tech stack can be the world's standard if we race."
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Nvidia and AMD To Pay 15% of China Chip Sale Revenues To US Government More

Nvidia and AMD To Pay 15% of China Chip Sale Revenues To US Government

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  • Racket (Score:5, Insightful)

    by dunkelfalke ( 91624 ) on Monday August 11, 2025 @05:52PM (#65582888)

    So it is a matter of national security unless protection money is paid, then suddenly national security doesn't matter. Nice company you have. Shame if something happened to it.

  • who's "AI tech stack"? (Score:5, Insightful)

    by dfghjk ( 711126 ) on Monday August 11, 2025 @06:18PM (#65582972)

    "America's AI tech stack can be the world's standard if we race."

    What's "America's AI tech stack"? How can it be "the world's standard", who is "we"? And what does it mean to "race"? Isn't every word of this bullshit?

    • Re:who's "AI tech stack"? (Score:4, Insightful)

      by bjoast ( 1310293 ) on Monday August 11, 2025 @06:24PM (#65582988)

      Isn't every word of this bullshit?

      No, there's a the in there that I am not completely certain constitutes bullshit. It might, however. It might.

    • "America's AI tech stack can be the world's standard if we race."

      We could just work together you know. Oh urgently need to feel great again. Yeah, midlife crisis can do that.

    • "America's Tech Stack" is basically NVidia's CUDA. AMD has a similar stack (ROCm/HID I think.) Huawei's AI chips would be something altogether different, as I would expect Apple AI. From what I've read, current software development for the various AI chips is very hardware specific. That is, there is no efficient translation from NVidia->AMD/etc. or vice versa. So the stated theory is, we want the whole world using one of the U.S. proprietary stacks (even if Open Source,) effectively locking the wor

  • 15% of revenues (Score:5, Informative)

    by Artem S. Tashkinov ( 764309 ) on Monday August 11, 2025 @06:22PM (#65582982) Homepage
    Paying 15% of revenues is not the same as 15% of profits. Thatâ(TM)s a substantial amount. If their profit margins were around 50%, it would equate to about 30% of their profits.

    • Err tariffs and duties are always paid on revenue and not profits. This is just a reminder for people to remember to call things what they are. This is "someone else pays" falsehood reframed in a different way. Costs that eat into profits are redistributed to customers.

    • Semiconductor margins are usually much higher than 50%.

  • Extortion (Score:5, Insightful)

    by Retired Chemist ( 5039029 ) on Monday August 11, 2025 @06:27PM (#65583002)
    If anyone but the government was doing this, it would be called extortion.

    • Re:Extortion (Score:4, Insightful)

      by drinkypoo ( 153816 ) <drink@hyperlogos.org> on Monday August 11, 2025 @06:37PM (#65583040) Homepage Journal

      If anyone but the government was doing this, it would be called extortion.

      It's still called extortion by anyone who is not a maggot cultist.

    • Re:Extortion (Score:4, Informative)

      by Rinnon ( 1474161 ) on Monday August 11, 2025 @06:37PM (#65583042)
      You can still call it extortion.

    • Re: (Score:1)

      by bjoast ( 1310293 )
      Yes, but if anyone but the government maintained an arsenal of nuclear weapons it would be called terrorism, so perhaps this line of reasoning doesn't quite hold water.
      • Hardly the same thing. National defense and maintaining of the armed forces are unquestionably duties of the national government. Getting money from US corporations without the direct mandate of Congress is not. In fact, it may be unconstitutional.

        • Re:Extortion (Score:4, Insightful)

          by jacks smirking reven ( 909048 ) on Monday August 11, 2025 @07:01PM (#65583118)

          Sure though the Republican lawmakers and media won't stand for this.

          For my entire time on Earth they always reminded me how the government can only cause harm by interfering in private enterprise, free trade is critical in all areas, undue taxation causes so many bad things.

          They couldn't have just been lying this whole time right? The voters wouldn't stand for such dereliction of principles. Unless those were also a lie...

          • Re: (Score:2)

            by mjwx ( 966435 )

            Sure though the Republican lawmakers and media won't stand for this.

            For my entire time on Earth they always reminded me how the government can only cause harm by interfering in private enterprise, free trade is critical in all areas, undue taxation causes so many bad things.

            They couldn't have just been lying this whole time right? The voters wouldn't stand for such dereliction of principles. Unless those were also a lie...

            Seems conservatives only care about "not interfering" when their donors tell them to.

            Had the republicans had the power back in the 90s, Microsoft would still be an abusive monopoly.

        • Re: (Score:3, Insightful)

          by zeeky boogy doog ( 8381659 )
          I mean, if we're going to talk about what's legal, PedoPresident's entire thing of "I HEREBY DECLARE MOAR TARIFFS" is plainly illegal right on its face because Article I section 8 of the Constitution explicitly gives to Congress the power to "lay and collect Taxes, Duties, Imposts and Excises." Even his presence on the ballot was illegal because insurrectionist traitors are not allowed to hold any office in the United States.

          Neither this nor any of the other crimes he's committed / is committing right no

      • It's about the use of it. If the government misused their nuclear arsenal, it also would be called terrorism. "State terrorism" in particular (which was the first and sole meaning of "terrorism" before the 20th Century according to https://en.wikipedia.org/wiki/... [wikipedia.org] ). OTOH a citizen developing nuclear technology without military intent would not be called a terrorist. See David Hahn the "nuclear boyscout" https://en.wikipedia.org/wiki/... [wikipedia.org] who was not charged with anything serious.

        Here the government misused

    • I'm pretty sure it's still called "extortion" by anyone with a dictionary, or a decent understanding of what extortion is; government policy notwithstanding.

    • You're almost there... how about income taxes?
      • There is a constitutional amendment that specifically allows federal income taxes. They were found to be illegal before it was passed. Only Congress can impose income tax not the executive.
        • It's still government forcing you to pay at threat of violence and incarceration. The income tax was supposed to be temporary, I can't wait for WWI to end.
          • We still have not finished paying for it.
            • The taxes started going towards other things. The original "temporary" tax got instated as a permanent tax, and the 1-3% rate on just the rich is now killing the middle class, with huge debt. The government is a monster, and people keep voting for "free stuff".

    • If anyone but the government was doing this, it would be called extortion.

      It's extortion with a flag behind it. How do we fit the ball gag on the bald eagle? I've already seen the don't tread on me snake with one.

  • Also: is there a way to correlate large scale shorts and longs in these stocks against these deals?

    Fascinating to watch.

  • The premise of this being about national security (Score:4, Insightful)

    by ffkom ( 3519199 ) on Monday August 11, 2025 @07:07PM (#65583138)
    ... was a blatant lie to begin with. The US government knows very well that the Chinese can build their own AI chips, and a few percent more or less performance per Watt will not make a difference to any "security" question. So now we see the reason for this setup lie was to create some extra tax without calling it a tax.

  • Instead of selling one expensive part, they will sell more of their cheaper parts at a higher overall price.

    Higher volume, higher revenue, so what if Trump is skimming off 15%?

    The companies would have worked the math, it must be worthwhile.

  • If Trump wanted to extort NVIDIA or AMD, he should've called it a per-year or one-time fee that, coincidentily, would happen to be about 15% of their expected annual revenue.

    By explicitly pegging the extortion fee to the actual exports rather than projected exports, it's clearly an export tax, which is on its face unconstitutional.

    Just one more example of Trump "doing it wrong."

    • Should be pretty easy to knock it down in court then.

      • Should be pretty easy to knock it down in court then.

        Quite a bit of what Trump's been doing this past 6-7 months has been knocked down in court - which people somehow seem to miss.

      • Depends on if the judge is an appointed stooge like Aileen Cannon. In the end he appeals to the Supreme Court and it's rubber stamped 6/3.

  • Less competition for Huawei (Score:5, Interesting)

    by mkwan ( 2589113 ) on Monday August 11, 2025 @09:46PM (#65583478)

    And Huawei gets to price their GPUs 15% higher, and invest the proceeds in making the next generation more efficient.

  • If the chips were made outside of the US would they also be subject to the export tax? If so it feels like this would push mfg out of US.

  • the law that congress passed that allows the executive branch to do this?

  • Export tariffs (Score:3)

    by chefren ( 17219 ) on Tuesday August 12, 2025 @04:22AM (#65584030)

    I guess some tariffs are paid by the exporter after all :)

    Interestingly in some cases these are banned by the U.S. Constitution: "No Tax or Duty shall be laid on Articles exported from any State."
    https://www.law.cornell.edu/co... [cornell.edu].

    Although I guess if they are manufactured in Taiwan they can bypass that by never having them enter the U.S. in the first place, because if you read the linked page it states this was specifically for preventing taxes on physical goods leaving U.S. ports.

  • They had to bend the knee, and offer a tithe, to the God Emperor in the White House.

  • The US government is now officially for sale.

    Is the White House available as an AirBnB yet ?

    • Paying for a night in the Lincoln bedroom [wikipedia.org] is something that has plague the reputation of previous administrations. One of the many things that eroded the public trust in the Clintons. The couple have done more damage to the Democratic Party than any Republican could ever hope for.

      Trump is lucky in that he has no reputation to preserve and may be able to spin such a obvious cash grab as "good business" or "genius move". Don't let Trump trick you into thinking he invent grift, his predecessors were doing it l

  • FTFY (Score:2)

    by 0xG ( 712423 )

    Nvidia and AMD have agreed to give the Republican Party 15% of revenue

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