The US President, Donald Trump, explained that the 15% duty currently imposed on Nvidia's chip exports to China only applies to the older version of the H20 chip. He referred to the H20 chip as old in the sense that more modern technology, such as the Blackwell chip, is limited in exports.
Trump said that he could allow exports of the Blackwell chip, but only at 30-50% reduced performance levels by Nvidia. He explained why the chip's capabilities needed to be reduced before it could be sold in China. This week, Nvidia CEO Jensen Huang will visit the US to negotiate conditions under which the company wants to export the Blackwell chip.
Nvidia and Advanced Micro Devices (AMD) have decided to give 15% of the proceeds from the sale of chips to the AI in China to the US government. The agreement is an exception in providing export licenses and is an indication that the US administration wants to get financial gains from exporting tech.
They negotiated the 15% share when Trump started by demanding a 20% reduction. Nvidia will use 15% of the revenue that it generates through sales of H20 AI accelerator, whereas AMD will use the same percentage of its MI308 chip. Analysts caution that such deals could become a precedent for other American firms in China and lead to future difficulties in export control policy.
His latest statements have worried chip makers both in the US and China. He stated that he would impose 100% duties on imported chips unless the firms raise their investment in the US. Nevertheless, a significant number of large chip manufacturers are already complying with trade agreements in force, thus negating the possible effects of these new tariffs.
The current negotiation process involving the Blackwell chip by the Nvidia company in the US indicates the move by the US government to control technology transfer and maintain economic gains. Jensen Huang's visit can affect the future development of the relationship between the US and China on technology exports and exports in semiconductor industry in general.