Nvidia, AMD agree to pay Trump’s 15% levy on China chip sales

In a surprising twist ahead of the crucial August 12 deadline for a US-China trade agreement, President Donald Trump's administration has secured a deal with major chipmakers Nvidia and AMD. They have agreed to remit 15% of their revenue from sales of advanced computer chips to China to the US government, as reported by Reuters. This move has raised eyebrows among policymakers and national security experts. Many have expressed concerns that these chips could bolster China's artificial intelligence capabilities, which they argue represent a significant national security threat. The decision aligns with Trump's track record of adopting unconventional strategies regarding China, especially as tensions over tech and trade continue to escalate. While the specific plans for the collected funds remain unclear, the implications for US companies are alarming. Analysts suggest that this arrangement could negatively impact profit margins for Nvidia and AMD, particularly as export restrictions on Nvidia's H20 chips were initially imposed to safeguard American technology and maintain national security. Critics have been quick to respond to this unusual agreement. Geoff Gertz, a senior fellow at the Center for a New American Security, described the deal as “wild,” highlighting the potential risks of allowing the government to monetize chip sales without adequately addressing concerns over technology theft and the competitive landscape in AI development. This agreement may set a concerning precedent for US companies navigating the complexities of international trade and national security.