Nvidia, AMD may sell high-end AI chips to China if they pay US a cut

Core Viewpoint - The narrative surrounding the AI chip race has shifted from U.S. national security concerns to tariff implications, as Nvidia and AMD agree to pay 15% of their revenue from high-end AI chip sales to China in exchange for sales licenses [1][2]. Group 1: Company Agreements and Revenue Sharing - Nvidia will share revenues from its H20 AI chip sales in China, while AMD will share a portion of its MI308 chip sales [2]. - The U.S. government has begun issuing licenses for the sale of these chips by Nvidia and AMD [2]. Group 2: Historical Context and Policy Changes - The Trump administration initially restricted sales of certain high-performance AI inference chips to China in April but paused the ban after Nvidia committed to $500 billion in domestic data center investments [3]. - Nvidia announced in July that it would resume sales of its H20 AI chips to China, which were specifically designed for that market following earlier restrictions by the Biden administration [3]. Group 3: Trade Discussions and Criticism - Nvidia's decision to change its sales strategy is linked to trade discussions with China regarding rare-earth elements, essential for manufacturing components like electric vehicle batteries [4]. - The approval of Nvidia's H20 chip sales has faced criticism from national security experts and former officials, who have urged the government to reconsider its stance [4].