The White House says the 15% fee on U.S. chip sales to China, agreed to by Nvidia and AMD in exchange for export licenses, could be expanded to other semiconductor makers. The arrangement allows for sales of models like Nvidia’s H20, which meets U.S. export restrictions but outperforms China’s domestic chips. However, Chinese authorities have reportedly questioned tech giants including Tencent and ByteDance on why they’re buying U.S. chips instead of homegrown alternatives.
00:00More U.S. chipmakers might have to pay up if they want to sell in China, according to the White House, which reached a deal with NVIDIA and AMD to hand over 15 percent of profits from their China sales in exchange for export licenses.
00:14Well, look, right now it stands with these two companies. Perhaps it could expand in the future to other companies. I think it's a creative idea and solution. The legality of it, the mechanics of it is still being ironed out by the Department of Commerce, and I would defer you to them for any further details on how it will actually be implemented.
00:31At stake are AI chips like NVIDIA's H20, built specifically for China to meet U.S. export restrictions. But it's unclear if Beijing wants to let them in. Chinese officials have reportedly questioned tech giants like Tencent and ByteDance over why they're buying H20s instead of domestic chips, according to Reuters. And for NVIDIA, the China market is too big to ignore.
00:55We already saw NVIDIA, for example, pulled back by, I think it was $50 billion, pulled back on a 10-year forecast because of its loss of China. So I think we can be looking at similar.
01:11The H20 is faster than chips made in China, but still slower than NVIDIA's top of the line. And China is trying to change that, part of its long-term strategy to bolster its own chip industry, regardless of U.S. restrictions.
01:25The fate of the H20 may hinge on a future trade deal between Washington and Beijing,
01:48whose officials are due to meet in the coming months following a 90-day tariff truce. And that outcome could set the stage for the next AI race.
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