Physical Address
304 North Cardinal St.
Dorchester Center, MA 02124
Nvidia and Amd agreed to share some of them income According to several reports, the sales to China with the US government provokes a discussion on whether this step can affect the business giants of chips and whether Washington can look for similar transactions.
In exchange for 15% of the revenue from the sales of chips, both semiconductor firms will receive export licenses for selling Nvidia H20 chips and AMD MI308 in China, according to Financial times.
“We are following the rules that the US government sets for our participation in the world markets. While we have not sent H20 to China for months, we hope that export control rules will allow America to compete in China and worldwide,” Nvidia said in NBC News. “America cannot repeat the 5G and lose telecommunications guidance. The American AI Tech Stack can become a world standard when we run a race.”
CNBC turned to AMD and White House for comments.
The agreement created by the US Presidential Administration Donald Trump is “unusual”, CNBC analysts said, but emphasizes the transactional nature of the current White House leader. Meanwhile, investors consider this step both widely positive for both NVIDIA and AMD, which once again provide access to the Chinese market.
What does it mean for NVIDIA and AMD
H20 Nvidia is a chip that was specifically designed to meet export requirements to China. It used to be banned as part of export curbs, but the company last month said that it is expected China.
Also in July AMD stated that restore its MI308 inquis.
At the time, there was no opinion that sales recovery in China would come with the terms or any revenue confiscation, and the step was marked by the billions of dollars that had potential sales in China that have returned to the table.
On Monday, NVIDIA and AMD shares are traded just below in Premarket trading, emphasizing how investors believe that the latest development is not the main negative for companies.
“In terms of investor, it is still pure positive, 85% profit is better than zero,” said Ben Barringer, World Technology Analyst Quilter Cheviot, CNBC.
“The question will be whether NVIDIA and AMD adjust their prices by 15%to take into account the fee, but ultimately it is better so they can sell to the market rather than transfer the market completely Huawei.”
Huawei This is the closest Chinese competitor Nvidia and AMD.
Nevertheless, the uncertainty emerges for both US companies over a long time.
“In the short term, the transaction gives both companies a certainty in their exports to China. In the long run, we do not know whether the US government will want to take a greater gathering in China, especially if their sales in China continue to rise,” George Chen said, partner and co-chair of digital practice in Asia Group, CNBC.
Trump is unlikely to use similar transactions
Many analysts said CNBC that the transaction is “unusual” but practically in Trump.
“This is a good development, though strange, and feels that such an agreement you can expect from President Trump, which is in the heart.
Neil Shah, a partner in Controppoint Research, said the revenue reduction is equivalent to “indirect tariffs in the source”.
CEO of Futurum Group Daniel Newman too Posted on X on Sunday That this step is a “peculiar” tax “for doing business in China.”
But such transactions are unlikely to decline for other companies.
“I don’t guess it spreads to other sectors that are just as important for the American economy Like software and services, “said CNBC Nick Protiance.
The US views semiconductors as strategic technology, given that they underpin as many other tools as Artificial intelligenceConsumer electronics and even military applications. Thus, the United States has put chips under exports control unlike any other product.
“Semiconductor is a very unique business, and payout tactics can work for NVIDIA and AMD because it is about getting export approval from American Gov,” said Chen Asia.
“Other businesses such as Apple and Meta can be more complicated when it comes to their business models and services for China.”
As China could react
Semicists became a very sensitive geopolitical topic. Over the past two weeks, China has expressed concern about Nvidia’s security.
At the end of last month, Chinese regulators asked Nvidia To “clarify” reports on potential safety vulnerabilities and “rear room”. Nvidia has rejected the possibility that it has any “back” that would allow anyone to access and control them. Sunday, Nvidia again denied that his H20 semiconductors have a background after allegations of social media account related to Chinese state media.
The Chinese State Global Times killed Washington tactics with reference to an expert.
“This approach means that the US government has abandoned its initial safety justification to pressure US chips to provide export license to China through an economic lever,” the Global Times said.
The Chinese government has not yet commented on income reports.
Trump’s transaction with Nvidia and AMD is likely to have mixed feelings in China. On the one hand, China will be dissatisfied with the agreement. On the other hand, Chinese companies are likely to want to take these chips to continue to promote their own capabilities.
“This is a mystery for China, because they need these chips to promote their ambitions II, but the US government’s fee can make it more expensive, and there are doubts about our” back bills “, believing we agreed to supply the chips,” said Shah Controfope Research.
– Erin Dagerti CNBC contributed to this report.
