Nvidia, AMD China Chip Sales: A New Revenue Share Deal?

Shifting US-China Chip Export Policy

• 💡 The US government, under President Trump, is considering allowing Nvidia to sell a scaled-down version of its advanced Blackwell AI chips to China.
• 💰 A proposed deal involves Nvidia paying 15% of revenue from these shipments to the US government, a concept also being applied to AMD's MI308 chip.
• ⚠️ This revenue-sharing agreement is seen as a departure from traditional export controls, potentially setting a new precedent for US companies in China.

Rationale Behind the Policy Change

• 🎯 The primary goal appears to be securing financial benefits for the US, framed as a "payout" in exchange for concessions on trade.
• 🚀 For companies like Nvidia and AMD, this policy change is viewed as a catalyst for higher growth and upward revenue revisions, as it allows them to sell chips rather than nothing.
• 🧠 The argument is that by allowing sales of less advanced chips, China remains reliant on US technology, potentially slowing their own independent development pace.

Concerns and Future Implications

• 🔍 Experts and media suggest this "pay-to-play" model could undermine the national security rationale behind export controls.
• 🚫 It's unlikely that leading-edge chip equipment tools will be approved for sale to China, indicating that this new approach may not extend to all sectors of the semiconductor industry.
• 📈 Transparency regarding the use of these collected proceeds remains unclear, with speculation that funds might offset deficits or be reinvested in US tech R&D.

China's Semiconductor Ambitions

• ⚠️ While China is actively pursuing independence in semiconductor technology, this process is time-consuming due to the need for extensive R&D and development tools, which the US currently controls.
• ⏳ The current US policy aims to maintain leverage by controlling what China receives and how quickly, preventing them from developing superior technology at a faster pace than if they had unrestricted access.