Trump Personally Negotiates Nvidia Chip Deal with China,Demanding Revenue Share
A highly unusual agreement brokered directly by former President Donald Trump will allow Nvidia to sell a less advanced chip to China,with a portion of the resulting revenue directed to the U.S. government.The deal, first reported Sunday by the Financial Times, represents a significant shift in Washington’s strategy to limit beijing’s access to advanced semiconductors.
The arrangement comes as the U.S. continues to express concerns that China’s development of complex artificial intelligence capabilities, powered by cutting-edge processors, could have implications for national security. Since 2022, the Biden governance has maintained export controls on these chips, considerably impacting U.S. chipmakers, most notably nvidia, the industry leader.
Speaking at a White House news conference on Monday, Trump detailed his direct involvement in the negotiations with Nvidia CEO Jensen Huang. the agreement centers around the H20 chip, which Trump characterized as “obsolete” despite its continued commercial viability.
“H20 is obsolete but it still has a market,” Trump stated. “So I said, listen, I want 20 percent if I am going to approve this for you, for our country… I don’t want it myself.”
According to Trump, Huang initially proposed a lower percentage. “He said, will you make 15? So we negotiated a little deal,” Trump added. The final agreement reportedly involves Nvidia remitting 20% of the H20 chip sales revenue generated in China to the U.S. government.
This unconventional approach to enforcing export controls raises questions about the long-term implications for the semiconductor industry and U.S.-China relations. While the deal allows Nvidia to continue generating revenue in a key market, it also establishes a precedent for direct presidential intervention in commercial negotiations and the imposition of financial levies on companies seeking to operate in restricted territories.
The move underscores the complex balancing act facing Washington as it attempts to curb China’s technological advancement while minimizing the economic fallout for American businesses. The success of this arrangement, and whether it will be replicated with other companies facing similar restrictions, remains to be seen.
Why: The deal stems from U.S. national security concerns regarding China’s AI development and its reliance on advanced semiconductors. The Biden administration, as 2022, has imposed export controls on these chips, impacting companies like Nvidia. Trump’s intervention aimed to find a compromise that allowed Nvidia to continue sales while benefiting the U.S.
Who: The key players are former president Donald Trump, Nvidia CEO Jensen Huang, and the U.S. and chinese governments. Trump directly negotiated the agreement with Huang, while the U.S. government will receive 20% of Nvidia’s H20 chip sales revenue in China.
What: The agreement allows Nvidia to sell its H20 chip – described by Trump as “obsolete” – to China. In exchange, Nvidia will remit 20% of the revenue from these sales to the U.S. government. This is a departure from standard export control enforcement.
How: trump personally negotiated the deal with huang, initially starting with a proposed 15% revenue share from Nvidia, ultimately settling on 20%. The agreement bypasses traditional bureaucratic processes and establishes a direct financial arrangement linked to restricted exports.
How did it end?: The deal concluded with a signed agreement between Nvidia and the U.S. government,facilitated by Trump’s direct negotiation
