American authorities reap a 15% portion of the chip sales transacted with China.
In a significant move, the U.S. government has tightened rules for semiconductor sales to China, affecting tech giants like Nvidia and AMD. This decision, announced earlier this year, has potentially cost Nvidia billions in losses, according to initial estimates.
Before the U.S. blockade, analysts estimated that Nvidia would sell over $20 billion (€17.14 billion) worth of H20 chips to China this year. However, with the new restrictions, these sales are now in jeopardy. The Trump administration's policy requires Nvidia and AMD to give the U.S. government a 15% revenue share on their AI chip sales to China in exchange for export licenses to sell certain advanced chips like Nvidia's H20 and AMD's MI308 to the Chinese market.
This policy has caused investor concerns and share price declines, as it directly cuts into the companies' revenues. Nvidia CEO Jensen Huang has been vocal about his opposition to these restrictions, arguing that they will only encourage China to develop its own technologies and create new global competitors for American companies.
The policy represents an unprecedented U.S. government intervention in corporate affairs, aimed at bolstering national security and maintaining a technological edge over China. However, it also raises concerns about market distortions and deviations from free-market capitalism.
Potential implications for American companies in the AI industry include short-term access to the large Chinese market for AI chips at the cost of government revenue sharing, increased government involvement in business decisions and revenue, a possible shift away from purely market-driven competition, and heightened scrutiny and regulatory complexity for exports to China.
Despite the challenges, Nvidia and AMD have been able to re-enter the lucrative Chinese market, albeit with reduced profits. In July, the U.S. government announced they would again allow shipments of weakened AI chips to China.
The U.S. government's strict policy on semiconductor sales to China has been a subject of criticism, with some arguing that it may slow China's advancement in artificial intelligence but at the expense of American companies' competitiveness and global trade relations.
Elsewhere in Hamm, the city's news platform features various stories, including the Safe Haven in Hamm, Welcome To My Garden in Hamm's Kurpark, and the Success Story of the collaboration between HSHL and Uni in Kyiv. The Safe Haven in Hamm has been approved but not yet implemented.
Meanwhile, President Trump initially demanded a 20% cut for the country from these sales, but the final agreement stipulates a 15% cut. Nvidia CEO Huang met with President Trump at the White House on Wednesday before the licenses were granted.
In the midst of these developments, the Welcome To My Garden event in Hamm's Kurpark attracted thousands of visitors, offering a respite from the ongoing geopolitical tensions. The city of Hamm continues to be a vibrant hub, showcasing a diverse range of stories and initiatives.
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