The president of the United States, Donald Trump, broke with decades of national security policy of the country and created a new category of corporate risk when he reached an agreement with Nvidia so that the US government receives a part of its sales in exchange for resuming exports of artificial intelligence chips prohibited to China.
Historically, the US Government made decisions on the control of exports from sensitive technologies based on national security reasons. Those decisions were considered unnegociable; If a technology was subject to controls, companies could not overcome them through payments, regardless of how lucrative were international sales that were lost.
On Monday, Trump seemed to end that era, by stating that it would allow Nvidia to sell her H20 chips to China in exchange for the US government. Uu. Receive 15% of the sales of some advanced chips in that country. He made a similar agreement with the smallest competitor in Nvidia, AMD.
He also told journalists that he is open to allow NVIDIA to sell a reduced version of his current Blackwell flagship chip to China.
Months ago, his own administration had banned the sale of the H20 chips to China, but reversed the decision in July, as part of what the government described as negotiations on rare earths.
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Trump opens the door so that Nvidia can sell a small version of Chip to China
This last movement generated convictions by US legislators of both parties, who warned that this could create a “pay to play” model in the sale of technologies sensitive to US adversaries. UU., A concern shared by analysts and legal experts.
“Export control is a first -line defense to protect our national security, and we should not establish a precedent that encourages the government to grant licenses to sell technology to China that will improve their AI capabilities,” said representative John Moolenaar, Republican of Michigan and president of the select committee of the Chamber on China.
The representative Raja Krishnamorthi, Democrat of Illinois and a prominent member of the same committee, said that “by putting a price on our security concerns, we send the message to China and our allies that the principles of national security of the United States are negotiable for the appropriate price.”
Risk of legality?
The Trump administration states that national security risks when resuming H20 sales are minimal, since this chip already sold widely in China.
The Secretary of Commerce, Howard Lutnick, described NVIDIA in an interview with CNBC last month to H20 last month. He said it is of interest to the US that Chinese companies continue to use American technology.
But this agreement is extremely unusual in the US. And represents Trump’s last intervention in corporate decisions, after pressing executives to invest in US manufacturing and demand the resignation of the CEO of Intel, Lip-Bu Tan, for their links with Chinese companies.
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It is not clear if Trump’s measure is legal.
The US Constitution prohibits Congress from imposing taxes or rights on exported articles from any state. The commercial lawyer Jeremy Iloulian said that it is difficult to determine whether this would be considered an “export tax” or other payment, without knowing more details of the agreement.
“Until today, it had never been considered how much companies have to pay to receive an export license,” said Iloulian.
Kyle Handley, professor at the School of Global Policy and Strategy at the University of California in San Diego, added: “This seems clearly an export tax … they can call it as they want, but it really seems that the government is taking a slice of the business.”
When asked if Nvidia had agreed to pay 15% of his income to the US government, a company spokesman said: “We follow the rules established by the US government. UU. For our participation in world markets.”
“While we have not sent H20 Chips to China for months, we hope that export control rules allow the United States to compete in China and the world,” added the spokesman.
An AMD spokesman said that USA approved his requests to export some AI processors to China, but did not directly address the income distribution agreement, and pointed out that the company meets all US export controls. UU.
Lee: Trump says that Nvidia will not be able to sell his Blackwell chip to China, for this reason
“Everything is negotiable”
“I think it is fair to say that now everything in this administration seems negotiable in ways that were not before,” said Sarah Kreps, a professor at the Brooks public policy school at Cornell University. “I don’t think this is a unique case or that it is the last agreement of this type we see.”
A slippery slope
Stock analysts said that this type of lien could affect the margins of chips manufacturers and sit a precedent for Washington to impose taxes on critical exports from the US.
“It seems to us a slippery slope,” said Bernstein analysts, who expect the agreement to reduce the gross margins of the processors destined for China between 5 and 15 percentage points, decreasing approximately one point the general margins of Nvidia and AMD.
“Naturally, not only chips manufacturers, but also companies that sell other strategic products to China, will ask if this remittance model could be applied to their industries,” said Hendi Susanto, portfolio manager in Gabelli, which has Nvidia actions.
“For strategic products sellers to China, remittances could be a burden … or a salvation table to preserve access to a huge and growing market in China,” Susanto concluded.
With Reuters information.
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