00:00American chip firms AMD and NVIDIA have agreed to pay the U.S. government 15% of their China
00:05sales in exchange for export licenses. What's your initial thoughts on this agreement?
00:11This is quite an unprecedented agreement, and it really goes to show how important chips have
00:16become in this AI race between the U.S. and China. So the Trump administration has unapologetically
00:22called for companies to invest more in the U.S. However, this is quite different in terms of a
00:30move that uses export controls as leverage. Now, the U.S. administration has long said that they
00:37would deny China access to AI chips because of national security concerns, especially concerns
00:43that China would use these chips in military applications or otherwise overtake the U.S.
00:48dominance in AI. Now, it seems a price has been put on those national security concerns,
00:54and the price seems to be 15% of global revenues. If NVIDIA and AMD are going to benefit from relaxed
01:03export controls, that is the price that they will have to pay to the U.S. government to achieve it.
01:08How would you expect export controls like this to affect the AI race?
01:14It's important to note that the current chips we're talking about in the frame of this
01:18agreement are not the cutting edge AI chips. You could argue, therefore, that giving access to
01:24those chips to China are not going to compromise America's lead in AI. On the other hand, I think
01:31it's important to look at how China has actually responded to tightening export controls over the
01:36past number of years. Chinese companies have been able to produce really impressive products like
01:42DeepSeq's R1 model and Moonshot AI's Kimi-2 model, despite not having access to the best of the best.
01:49I think the lesson we should draw from this is not to underestimate China's capacity to do more with
01:56less. And so the influence this will have on the longer term AI race is really quite uncertain,
02:02but I would certainly heed the warning of not underestimating Chinese capabilities.
02:06Taiwan. TSMC is a huge supplier of both AMD and Nvidia. Is there any impact with these export
02:15controls, if any, for the Taiwanese chip market? I think you will see that if this agreement goes
02:21ahead, there will be increased sales, right? That's the natural that China will take advantage of the
02:27relaxed restrictions and it will probably mean more business for TSMC. There is, however,
02:34at the same time quite a lot of pressure from the Trump administration for chip manufacturing to be
02:40reassured back to the United States. I think he's put it very bluntly that he expects to see chip
02:46manufacturing return home to the US. I don't think that pressure is going to abate. I certainly think
02:54that the increase in sales and the increase in demand will create opportunities, but there will be
02:59opportunities that the Trump administration will be looking very closely and wanting to make
03:04sure that those opportunities benefit American investment and American workers.
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