White House says it's working out legality of Nvidia and AMD China chip deals

The Biden administration is currently assessing the legal framework surrounding a 15% export tax on semiconductor deals involving Nvidia and AMD, as stated by White House spokesperson Karoline Leavitt on Tuesday. Leavitt mentioned that while the focus is on these two companies for now, there is potential for the policy to extend to others in the future. President Donald Trump confirmed on Monday that he had successfully negotiated a deal with Nvidia, allowing the U.S. government to approve export licenses for the H20 AI chip, specifically designed for the Chinese market, in exchange for a portion of the revenue. Similarly, Advanced Micro Devices also secured approved licenses for its sales in China. Trump articulated, "If I'm going to do that, I want you to pay us as a country something because I'm giving you a release." Meanwhile, Nvidia remarked that they adhere to regulations set by the U.S. government regarding global market participation. Despite the announcements, trade lawyers have expressed concerns regarding the complexity of these agreements, pointing out that existing laws may complicate how the government can impose fees for export licenses. The Commerce Department has not yet responded to requests for clarification on this matter. The H20 chip is a modified version of Nvidia's offerings, deliberately restricted to meet U.S. export regulations, and is connected to the widely utilized H100 and H200 models in the U.S. market. This product was introduced following the Biden administration's implementation of export controls on AI technologies earlier this year. Nvidia had projected over $8 billion in sales for the H20 chips in a single quarter before the Trump administration mandated licensing for its export. Following a visit from Nvidia CEO Jensen Huang to the White House in July, Trump indicated that he was inclined to approve the export licenses. These AI chips are under stringent regulation due to national security concerns, as there is apprehension that they could enhance China's technological capabilities or be utilized by military-linked entities. Recently, reports have emerged that the Chinese government is encouraging its domestic firms to refrain from using Nvidia's H20 chips for any government or national security applications.