Workflow
Trump says he asked for 20% cut from Nvidia, calls H20 an 'obsolete' chip
NvidiaNvidia(US:NVDA) CNBCยท2025-08-11 17:11

Core Insights - Nvidia has agreed to pay a 15% cut of its sales to China in exchange for export control licenses to sell the H20 chip, down from an initial request of 20% by the U.S. government [2][8] - The H20 chip is considered obsolete by the U.S. government, with President Trump stating that it is an "old chip that China already has" [3][6] - The U.S. government is concerned that advanced chips could enhance China's AI capabilities, posing a national security threat [5] Group 1: Nvidia's Negotiations and Agreements - Nvidia's CEO Jensen Huang negotiated with President Trump to reduce the initial 20% cut to 15% for sales to China [2] - Huang visited the White House to discuss the export control licenses, which are crucial for Nvidia's sales strategy [2][8] - Nvidia was expecting to generate approximately $8 billion in sales from H20 chips before the export restrictions were implemented [7] Group 2: U.S. Government's Position on AI Chips - The U.S. government has implemented export controls to prevent advanced AI chips from being sold to China, fearing that it could allow China to surpass the U.S. in AI technology [5] - President Trump emphasized that the Blackwell chip, Nvidia's latest AI chip, would not be sold to China without significant performance downgrades [4] - The U.S. administration's stance is that allowing access to advanced chips could threaten national security [5] Group 3: Competitive Landscape - The H20 chip is specifically designed for the Chinese market and has been intentionally slowed down in performance [6] - AMD, another key player in the AI chip market, is also required to pay a 15% cut for its China-focused AI chip, the Instinct MI308, to secure export licenses [8] - The competition between U.S. chipmakers and the Chinese chip industry is highlighted, with concerns that denying access to U.S. technology could accelerate China's chip development [6]