【By Observer Net, Ruan Jiaqi】

Earlier reports by the UK media, the Financial Times, stated that U.S. chip companies NVIDIA and AMD have agreed to "contribute" 15% of their revenue from chip sales in China to the U.S. government in exchange for export licenses issued by the Trump administration. This news has shocked the public, with U.S. media expressing surprise at the unprecedented practice of demanding a portion of corporate income in exchange for export licenses.

At a White House press conference on Monday (11th), President Trump confirmed the incident and revealed more details of private negotiations. According to reports by CNN, Politico, and others on the 11th, Trump admitted that he had requested NVIDIA to pay fees for export licenses to China, initially proposing a 20% cut of sales.

"I said, 'If I approve you doing this (exporting chips to China), I want 20% (of the revenue). It's for the country, for our country. I don't want it myself,'” Trump answered a reporter's question. “Then he said, 'Can we reduce it to 15%?' So we made a small deal.”

Regarding concerns that approving this deal would weaken national security, Trump seemed unconcerned. To support his argument, he described NVIDIA's H20 chip, which was recently allowed to be exported to China, as an "obsolete" product and claimed that China already has chips with similar performance to the H20.

Trump then claimed that he plans to discuss a new agreement with Huang Renxun, allowing NVIDIA to sell chips based on its latest and most advanced Blackwell platform to China, but with a "30% to 50%" reduction in performance.

"This is the world's most advanced and cutting-edge chip, no one has it, and they won't get it for five years," he added. "I think he (Huang Renxun) will come back to me to discuss this, but it will be a 'downgraded version' of that high-end chip."

According to the Financial Times, the U.S. currently prohibits the sale of any version of NVIDIA's Blackwell chips to China. In May this year, there were reports that NVIDIA was developing a Blackwell chip specifically designed for the Chinese market, similar to the H20, which would remove high-bandwidth memory (HBM) and use GDDR7 memory instead to comply with U.S. export restrictions, with an expected release later this year.

NVIDIA declined to comment on Trump's remarks about the Blackwell chip. In a statement, the company defended itself, saying, "We comply with the rules set by the U.S. government for global market participation. Although we have not shipped H20 to China for several months, we hope that export control rules will allow U.S. companies to compete in the U.S.-China and global markets. The U.S. cannot repeat the mistakes of 5G and lose its leadership in the telecommunications field. If we actively compete, the U.S. artificial intelligence technology system has the potential to become the global standard."

On August 11, when discussing issues related to U.S. chip export controls to China, Lin Jian, spokesperson for the Chinese Foreign Ministry, reiterated that China opposes politicizing, instrumentalizing, and weaponizing science and technology and trade issues, and its position against malicious blockades and suppression of China has always been clear and consistent. Such practices disrupt the stability of the global supply chain and are not in the interest of any party.

On August 11, local time, Trump answers questions at a White House press conference. Video screenshot

The Financial Times cited U.S. officials who said that NVIDIA will "share" 15% of its revenue from selling H20 chips in China, and AMD will also submit an equivalent proportion of revenue from its MI308 AI chips to the U.S. government. Two informed sources said that the Trump administration has not yet decided how to use this money.

Bloomberg believes that such an arrangement reflects the Trump administration's usual approach of seeking financial returns through trade concessions. However, in modern corporate history, such a limited, selective "export tax" has almost no precedent.

Regarding the legality or constitutionality of Trump's move, the White House spokesperson did not respond.

John Moolenaar, a Republican congressman from Michigan and chairman of the House "China Affairs Special Committee," was quick to react.

He told the Financial Times, "I am concerned about the report that the U.S. government will take a share of profits from chip sales to China. There are legal doubts about this practice. Export controls are the front line for protecting our national security, and we should not set a precedent."

Some informed sources also told British media that some security officials are considering resigning in response to this signal sent by Trump.

"The purpose of export control officials going to work every day is not to sell national security," one of them claimed. "This practice will cause lasting damage to our export control system, which is already struggling."

In recent years, the United States has expanded the concept of "national security" into a broad basket to suppress and contain China. In April this year, the U.S. banned NVIDIA from selling H20 chips to China under the pretext of "national security and economic security."

In June, Huang Renxun visited the White House to meet Trump, after which the Trump administration relaxed its stance. Huang Renxun revealed during his July visit to China that the U.S. had allowed him to resume exporting H20 chips to China.

"This is really absurd," said Geoffrey Gertz, a senior researcher at the Center for New American Security (CNAS) in Washington, to Reuters.

"If there is indeed a national security risk in selling H20 chips to China, we shouldn't have done it in the first place. If there is no national security risk, why should we impose additional penalties on this type of sales?" Gertz asked.

Former U.S. trade official Stephen Olson also criticized the situation on Politico, saying, "Calling this unusual or unprecedented is an understatement. What we are actually seeing is the monetization of U.S. trade policy. U.S. companies must pay the U.S. government to obtain export licenses. If this is the case, we have entered a new and dangerous world."

According to Bloomberg estimates, in the fiscal quarter ending April 27, the H20 chip brought NVIDIA $4.6 billion in revenue, but due to previous restrictions, another $2.5 billion worth of products could not be delivered. Assuming normal levels, the U.S. government could earn about $1 billion per quarter from these transactions. Morgan Stanley data also showed that if restrictions are lifted, AMD's revenue in 2025 could increase by $3 to $5 billion.

According to Bloomberg, this amount is not very large, and both NVIDIA and AMD have stated that even if order volumes return to previous levels, it will take time to restore production capacity for products targeting the Chinese market.

"But considering the U.S. fiscal deficit and its eagerness to collect tariffs, the U.S. government clearly needs this money," said Vey Sern Ling, managing director at RBC Capital Markets.

It is worth noting that Bloomberg also noticed that Chinese companies have become increasingly cautious about using H20 chips recently.

The new media account "Yuyuantan Tian" under China Central Television reported that since July 31, the State Internet Information Office has held talks with NVIDIA regarding the security risks of backdoors in H20 computing chips. Since then, NVIDIA has made three responses, emphasizing the importance of cybersecurity for the company and stating that its chips do not have "backdoors." These responses need to be verified by further actions from NVIDIA.

"Yuyuantan Tian" also pointed out that the H20 chip is "not environmentally friendly, not advanced, and not secure," and is not a "good choice."

This article is an exclusive article from Observer Net. Reproduction without permission is prohibited.

Original: https://www.toutiao.com/article/7537512018501288487/

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