Trump Shifts Stance in Letting Nvidia Sell H200 Chips to China

Watch Trump Shifts Stance in Letting Nvidia Sell H200 Chips to China - Bloomberg on Dailymotion

Transcript

00:00Turning back to one of our top stories, President Trump allowing NVIDIA to sell its H200 chips to

00:05China. Bloomberg's Ed Ludlow joins us from San Francisco with more. Ed, how much of a reversal

00:11is this in Silicon Valley, given the fact that it seems like there is a shift in the approach to

00:16national security? As a point of export control policy, a big shift. And, you know, I think even

00:22Bloomberg Economics published a note on it, which I enjoyed reading, because the H200 is a piece of

00:27technology at the center of export control policy. The soundbite that you played from your last guest

00:33is interesting. What is the H200? It is many times more powerful than the H20, which was specifically

00:41designed as a deprecated chip for the Chinese market, right? And this is a debate the three of

00:47us have discussed this week and many weeks prior, that the position of NVIDIA and Jensen Wang has

00:53been. It won't work to export a deprecated chip to China. They won't accept it. The H200 is a cutting

01:01edge chip. It is one generation removed from Blackwell that's available to technology companies

01:06in America, but it's highly performant. And so it does mark this shift in the spectrum of China

01:13hawkishness. We've gone from a position where loads of people in the president's orbit are OK with

01:18exporting a deprecated chip to now being OK with exporting a more powerful chip. But of course,

01:25across the political divide, there are many national security concerns and the ball is now

01:29in China's court because we don't really know if China even wants it. Right. That's a big question.

01:34Does China even want it? The Financial Times has some reporting that potentially they're going to have

01:38a review process and some firms may get access to it if they can show the reasons why they need this

01:44instead of using a Chinese company's chip. But Ed, if NVIDIA is able to sell a lot of these H200s

01:52into China or China really opens up the door, what kind of money are we talking about for the bottom

01:57line? Yeah. Look at the trading of NVIDIA shares in the immediate aftermath of the president's true

02:03social post through to this morning. And momentum was lost very quickly. The baseline assumption for

02:10NVIDIA right now is zero revenue from China within this fiscal year and the next fiscal year. But of

02:16course, when this news hit, the analysts quickly remodeled to work out how much revenue is possible in

02:20China. Jensen Wang has said that this is a $50 billion market opportunity. But the issue is the

02:27degree to which they can work with China on that. You know, you're right. The reporting reflects that

02:33China's position is to say, particularly to state-backed enterprise, we want you to first prioritize using

02:39domestic chips that are massively supply constrained before using the H200. So again, NVIDIA's baseline

02:46assumption is zero revenue from China, although they'd love it. And now the analysts between them

02:51have a very wide range of estimates of what's realistic in the fiscal 27-year. All this is in

02:57exchange for a 25% tariff. But Ed, I remember in the summer there was that 15% that was supposed to go

03:03to the U.S. government. Has the U.S. government seen a dime of that? No. And it's interesting,

03:10you will remember in August, I spoke to NVIDIA's CFO, Colette Kress, who is a classic CFO, a very

03:15experienced CFO. And she made the point that they are an American public company. They are bound by

03:21SEC regulations and by the Sarbanes-Oxley Act. And there is nothing codified or in existence in the

03:28legislature that provides for a mechanism where a company can issue a surcharge to the United

03:35States government, in this case of 25%. So my basic working understanding is that, of course,

03:41this is a discussion that's taken place between the president and Jensen Wang. But we need to see

03:46some specifics from the relevant regulatory agencies and government bodies on how it would work in

03:51practice. There are going to be loads of compliance and finance teams watching surveillance right now

03:57going, oh, I was thinking that as well, I think, because that's the basics of how a public company

04:01works in this country.