What a Trump Bid for Cut of Chip Revenue Means for China

Market Dynamics & Geopolitics - Nvidia's H20 chip is considered an older technology, already accessible in China under different forms or through combined existing chips [1][4][5] - The Blackwell chip represents Nvidia's most advanced technology, with potential restrictions on its availability to China due to security concerns and export controls [1][2][3][8] - The US government is potentially open to compromises on chip exports to China, particularly for scaled-back versions, recognizing the importance of the Chinese market to chip companies [8][9] - Chinese chip manufacturers are catching up, creating pressure for US companies like Nvidia and AMD to maintain their market presence in China [10] Security Risks & Negotiations - China is concerned about potential security vulnerabilities or backdoors in Nvidia chips that could be exploited by the US government [3][5][6] - Both the US and China need to address security risks associated with chip technology subject to export controls, potentially requiring negotiation [7] - China is actively investing in reducing its reliance on US chips [7] Company Strategy & Market Position - Nvidia is willing to make concessions, potentially around 15%, to continue selling chips in the Chinese market [11] - The Chinese market is vital for chip companies, prompting a willingness to compromise on technology and security concerns to maintain market share [9][10]