Guan Cha Zhe Wang·2025-08-12 06:40Core Points - The U.S. government has reached a special arrangement with Nvidia and AMD, requiring them to pay 15% of their chip sales revenue in China to the government in exchange for export licenses for specific chips like H20 and MI308 [1][2][3] - This arrangement is unprecedented in the U.S. and reflects a transactional approach where companies pay for export permissions, aligning with the Trump administration's pattern of conditional exemptions [3][4] Summary by Sections Arrangement Details - Nvidia and AMD agreed to pay 15% of their sales revenue from China to the U.S. government to obtain export licenses for their respective chips [2][3] - The U.S. Department of Commerce began issuing H20 export licenses shortly after a meeting between Nvidia's CEO Jensen Huang and President Trump [3][4] Financial Implications - Analysts estimate that Nvidia could sell 1.5 million H20 chips in China by 2025, generating approximately $23 billion in revenue, leading to a payment of about $3.5 billion to the U.S. government [4][5] - The arrangement effectively turns export licenses into a revenue-generating tool for the U.S. government, which has raised concerns among experts about the implications for U.S. technological leadership [6][7] Background Context - The H20 chip is a downgraded version of Nvidia's AI chip, specifically designed for the Chinese market after previous export restrictions were imposed [4][5] - The timing of this agreement is sensitive, coinciding with ongoing U.S.-China trade negotiations, where China is pressuring for relaxed restrictions on high-bandwidth memory chips [6][7] Strategic Considerations - The arrangement merges trade and technology issues, which traditionally have been treated separately in U.S. policy [11][12] - Trump's administration views trade as a security issue, integrating economic and technological considerations into negotiations with China [14][15] Future Outlook - The U.S. may adopt a more nuanced approach to technology export controls, balancing the need to maintain technological superiority while also ensuring revenue generation for the government [24][25] - The long-term implications of this arrangement could lead to increased dependency of Chinese companies on U.S. technology, while also fostering a competitive environment for domestic alternatives [20][21]