The AI chip race narrative used to be about U.S. national security, but apparently now it’s about tariffs: Nvidia and AMD have agreed to pay the U.S. government 15% of the revenue they make from sales of high-end AI chips to China in exchange for licenses to sell to those chips in the country, the Financial Times reported, citing anonymous sources.
According to the FT’s government source, Nvidia will share revenues from sales of its H20 AI chips in China, and AMD would share a cut of MI308 chip sales. The government has also started issuing licenses for the sale of the two companies’ chips, the report said.
The Trump administration in April had restricted sales of certain high-performance AI inference chips to China, but paused the ban a couple of months later, when Nvidia promised to make up to $500 billion worth of data center investments stateside. Then in July, the company said it would resume sales of its H20 AI chips to China, which it had designed specifically for sale in the country following restrictions by the Biden administration.
According to U.S. Commerce Secretary Howard Lutnick, Nvidia’s change of course was related to trade discussions with China regarding rare-earth elements, which are necessary for making components, like rechargeable batteries for electric vehicles.
The administration’s decision to approve the sale of Nvidia’s H20 chips has its critics: national security experts and former government officials wrote to Lutnick last month, urging the government to reverse course.
Great Job Ram Iyer & the Team @ TechCrunch Source link for sharing this story.
