Nvidia and AMD have agreed to give the US government 15% of their revenues from chip sales in China, under an unprecedented arrangement to obtain export licenses for the semiconductors, the Financial Times reported on Sunday.
The revenue share applies to Nvidia’s H20 chips and AMD’s MI308 chips, the report said, citing a US official, noting that the Trump administration had yet to determine how to use the money.
The chipmakers agreed to the quid pro quo arrangement as a condition for obtaining export licenses for the Chinese market that were granted last week, according to the unnamed official.
According to export control experts, no US company has ever agreed to pay a portion of their revenues to obtain export licenses, the newspaper reported. But Donald Trump has encouraged firms, and countries, to make investments in the US to, in his words, “buy down” the tariff rates he imposes.
Nvidia follows rules the US government sets for its participation in worldwide markets, an Nvidia spokesperson told Reuters in an emailed statement. “While we haven’t shipped H20 to China for months, we hope export control rules will let America compete in China and worldwide.”
AMD did not immediately respond to a request for comment.
The US commerce department started issuing licenses to Nvidia to export its H20 chips to China last week, removing a significant hurdle to the artificial intelligence bellwether’s access to a key market.
The US in July reversed an April ban on the sale of the H20 chip to China. The company had tailored the microprocessor specially to the Chinese market to comply with the Biden-era AI chip export controls.
Nvidia’s chips are a major driver of the AI boom, and in July the company became the first ever to have its market value surpass $4tn.
Complications facing the company are not necessarily over, however, with growing scrutiny of Nvidia by Chinese authorities. Late last month China’s cyberspace watchdog summoned Nvidia to a meeting to discuss whether the chips had any “backdoor” security risks which would allow remote access or control. Nvidia said they did not.
But Chinese state media has continued to raise concerns. In a commentary earlier this month, the People’s Daily said Nvidia must produce “convincing security proofs” to eliminate Chinese users’ worries over security risks in its chips and regain market trust. And On Sunday a state media account on Chinese social media platform WeChat said the H20 chips posed a security risk for China. The account, Yuyuan Tantian, claimed Nvidia chips could achieve functions including “remote shutdown” through a hardware “backdoor”. Nvidia has not responded.
With Reuters
Source: US Politics - theguardian.com
