00:00Okay. The big piece of news here, we'll check the NVIDIA and AMD charts right after this,
00:06but I definitely want to start with this one here. Peter Schiff and the Kobisi letter warn
00:12of a federal shakedown over NVIDIA and AMD's 15% chip revenue deal with the Trump administration.
00:19There are a link to a number of other tweets here in this story. So go ahead and check out
00:24the story if you want to go through some of the different, if you want to go through some of the
00:28different threads here. Okay. Let's talk about this. NVIDIA and AMD, two of the world's leading
00:34chip makers have reportedly agreed to pay a 15% of their revenues from chip sales in China to the
00:39US government as part of a deal to secure export license. This deal, which was a condition for
00:45the companies to sell their advanced AI chips, the H20 for NVIDIA and the MI308 for AMD in China
00:50has sparked controversy or controversy as they say across the pond and draw significant criticism
00:56from financial commentators. Schiff, not surprisingly, voiced strong opposition to the
01:02deal, labeling it as unconstitutional. Following the publication of the news over the weekend,
01:07Schiff took to X, formerly Twitter, and argued that the payments to the US government represent,
01:11quote, a federal shakedown, end quote, specifically criticizing the arrangement where companies
01:17pay based on revenue, not profit. The Kobisi letter took to X, highlighting the significant shift
01:25that the deal represents. The commentator warned that this marks a new era in trade negotiations
01:31where the Trump administration now negotiates on a company-by-company basis for trade deals.
01:38Quote, most people don't even realize how massive this announcement truly is, end quote. This covers 15%
01:44of revenue from China, not profit, both for NVIDIA and AMD. The trade war just entered a new era.
01:51Oh my God, hug your loved ones, folks. We're in huge trouble. The deal comes as the Trump
01:57administration has relaxed earlier export bans on NVIDIA's H20 chips to China, which has been imposed
02:03due to national security concerns. Despite these concerns, NVIDIA defended the arrangement, stating
02:08that it follows the rules set by the US government for participation in worldwide markets. Now, really
02:14quick, let's go back to Pro, and let's actually take a look at two of these charts, which are being
02:19affected by this right away. We'll start here with NVIDIA. NVIDIA, ooh, ooh, it looks like it's
02:25pared back some of its gains. Okay, so first things first here, NVIDIA actually looks very much like
02:29the spy chart, at least recently here. It does look like it's trying to take out the new highs
02:33that were set the same day here, Thursday, July 31st, the last day of July. If we look inside here,
02:39this is how the market reacted, right? As soon as the pre-market opened here, NVIDIA actually sold
02:46off. But for the rest of the morning here, it's actually been bid back to about even. We're down
02:51three-tenths of a percent here, down only 50 cents. This is setting up a possible red-green move here,
02:57so we'll see if that ends up taking place. Quick look at AMD's chart, I beg your pardon,
03:03shows almost the same thing. Same type of reaction here, an immediate move down on the opening of the
03:08pre-market. But as investors digest this news, it continued to climb back up.
03:15If we go back to the daily chart, you can hear what we look like on AMD. Almost said AMC there,
03:23but AMD, one thing that you might note right off the bat here is we have a little bit of a trend
03:28line. That actually represents a key level. Also worth noting, we are three points or just about
03:33four points above the 20-day moving average. I think as long as we want to keep the short-term
03:38trend intact here, we probably want that 20-day moving average to stay intact. But nonetheless,
03:43this is going to be a trend line that we're going to look for here. Let me go back to the actual story
03:48here. Oh, no, excuse me. This was the one that we just finished. There's another one for this.
03:55NVIDIA's H20 chips under fire in China over security fears. So interesting. We'll draw
04:03another hypothetical here for what's going on. The H20 artificial intelligence chips are facing
04:08mounting security concerns in China with state media and regulators, raising alarms about potential
04:14backdoor risks while the U.S. government secures revenue-sharing deals for the chip market exports
04:19license. So, okay, a couple of things here. So, number one, there was obviously a huge worry about
04:27there being backdoor in a lot of the Chinese technology that gets used here in America.
04:32We've actually seen it in a number of applications. Perhaps the scariest one that doesn't get talked
04:37about enough are some of the big industrial-sized transformers that are used to power our power grid,
04:42which all are made in China and have backdoors. That's been covered pretty extensively by some
04:48of the security experts that appear on things like the Sean Ryan Show and things of that nature.
04:53Not really talked a lot about in the mainstream media. The interesting thing here is now China
04:59appears to be accusing the U.S. of putting backdoor in their chips. So, the first thing that I would
05:06ask you is, what if this is like a 4D chess move where they're like, oh, well, the CCP can spy on
05:11Americans? Well, we'll try and do the same thing. You can have these chips. NVIDIA will pay us a little
05:16bit, but maybe there's a backdoor in there. Let me know if you guys think that's possible.
05:21NVIDIA's H20 chips have come under fire in China with the state media and the Cyberspace
05:25administration of China raising alarms about a potential security risk, including the possibility
05:29of backdoor features that could bypass authentication and allow remote access. Sounds familiar, doesn't
05:35it? On Sunday, an article by Yuan Tantian, if I pronounced that correctly, a social media account
05:42linked to the state broadcaster CCTV alleged that the NVIDIA H20 chips are not only environmentally
05:48unfriendly. Wait, they're saying that chips are environmentally unfriendly while they're
05:53starting new coal-fired power plants at a rate greater than anywhere else in the world?
05:58Cool story, bro. Cool story. But they're also potentially unsafe for Chinese consumers.
06:03In the article, Yuan Wen criticized the chip, saying that, quote, when a type of chip is neither
06:10environmentally friendly nor advanced nor safe, as consumers, we certainly have the option to not
06:16buy it, end quote. Yeah, you do. Yeah, you do. The article followed earlier criticism by the
06:22People's Daily, which called on NVIDIA to provide, quote, convincing security proofs,
06:27end quote, to alleviate concerns over the safety of these chips. NVIDIA has vehemently denied these
06:33allocations, stating that its products contain no backdoors and that are built to comply with U.S.
06:37regulations. A company spokesperson reiterated that the chips are designed to meet export control laws
06:42and that the company has taken steps to ensure security in its products. NVIDIA designed the H20
06:48chips specifically for the Chinese market after the U.S. imposed export restrictions on a more advanced
06:53AI chips in 2023. However, a reversal of the original ban, the Trump administration allowed
06:58NVIDIA to resume the sales of H20 chips to China in July 2025, provided the company adhere to certain
07:04conditions. These conditions reportedly included NVIDIA agreeing to pay 15 percent of its revenues from
07:09chip sales in China to the U.S. government in exchange for the license. Despite the U.S. policy
07:15reversal, NVIDIA faces increased competition from domestic Chinese chip makers like Huawei
07:20Technology, Canbercon, and Haigon. Huawei is the one that we have heard here for years in terms of
07:26them having a potential backdoor or some means of spying on Americans. Analysts predict NVIDIA
07:33shares of China's AI chip market will decline in 2025 as local companies aggressively expand.
07:39So there you go. I definitely couldn't do anything but chuckle when China is saying that they are worried
07:48about environmental stuff. I mean, what a load of hogwash that is. But this other aspect here about the
07:54potential backdoor, how fitting would that be if the United States brokered some deal where they could then
08:00have a backdoor into chips being sold to China? Now, I don't know if that's the case. Frankly, I don't really
08:05care. But that's what's going on out there. And I think that that should make this interesting. I think
08:11that should make it interesting. We'll see.
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