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Trump Considering Approval for Nvidia to Export Limited Performance AI GPUs to China, Stipulating 15% Revenue Share for U.S. Government, Granting Chinese Firms Access to Superior GPU Technology

Trump hints at potential approval for Nvidia to sell diminished Blackwell AI processors to China, contingent on a 15% share of related sales income being directed to the U.S. government. This decision might enable Chinese corporations to acquire significantly quicker hardware, surpassing...

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Trump potentially enables Nvidia to export inferior current-generation Blackwell AI GPUs to China,...
Trump potentially enables Nvidia to export inferior current-generation Blackwell AI GPUs to China, with the U.S. government gaining 15% of the associated earnings, while Chinese corporations receive access to significantly faster GPUs

Trump Considering Approval for Nvidia to Export Limited Performance AI GPUs to China, Stipulating 15% Revenue Share for U.S. Government, Granting Chinese Firms Access to Superior GPU Technology

In a move that balances national security concerns with economic interests, the U.S. government has proposed that Nvidia and AMD share 15% of their revenue from AI processor sales to Chinese entities [1][2][3]. This decision, made during the Biden era, has imposed performance restrictions on AI and HPC processors exported to China due to national security concerns [4].

Implications

The deal aims to leverage the U.S.'s position in trade negotiations with Beijing while maintaining oversight. Here are some key implications:

  1. National Security and Economic Balance: By allowing sales of AI chips to China while capturing revenue, the U.S. government seeks to balance national security concerns with economic interests.
  2. Unprecedented Revenue Model: This agreement introduces a novel revenue-sharing model where technology companies must contribute a portion of their international sales to the U.S. government. It may set a precedent for future transactions involving sensitive technologies.
  3. Impact on Chip Sales: The agreement could lead to resumed exports of advanced AI chips, like Nvidia's H20 and AMD's MI308, to China. This would be a significant development for both companies, as China is a major market for them.

Potential Effects

The deal could have far-reaching effects, both economic and strategic.

Economic Effects

  • Revenue for the U.S. Government: The U.S. could collect substantial revenue from these sales, potentially hundreds of millions per quarter, which could contribute to national debt repayment or other government initiatives.
  • Market Competition: By allowing these sales, Nvidia and AMD can re-enter the Chinese market, potentially increasing their global competitiveness and market share.

Strategic and Political Effects

  • Trade Negotiations Leverage: The deal might provide leverage in ongoing trade negotiations with China, as it aligns U.S. economic interests with national security concerns.
  • Model for Other Industries: The success of this model could lead to its adoption in other industries and technologies, potentially reshaping how governments approach trade and technology regulation.

Technological Effects

  • Innovation and Development: The agreement could encourage continued innovation in AI technology, as Nvidia is developing new chips like the Blackwell architecture for the Chinese market.
  • Regulatory Framework: It may influence the development of stricter export controls and regulatory frameworks for sensitive technologies, affecting how companies operate globally.

The deal reflects a strategic approach to managing the complexities of international trade and technology while addressing national security concerns and economic interests.

Current AI Hardware Landscape in China

The best AI hardware currently available to Chinese companies is Nvidia's H20 HGX GPU, offering 148 FP16/BF16 TFLOPS and 296 FP8 TFLOPS for AI training and inference, respectively [5]. However, the H20 HGX is 3.3 - 6.69 times slower than the full-blown H100 in AI workloads with AI data formats, making it a massively cut-down processor [6].

If Trump's administration proceeds with the proposal, both AMD and Nvidia may ship faster products to China. A hypothetical B100 cut-down by 50% would give buyers 900 FP16/BF16 TFLOPS, 1.75 FP8 PFLOPS, and 3.5 FP4 PFLOPS for AI training and inference, which no Chinese-made AI accelerator can match [7].

Stance of China Hardliners

China hardliners are not pleased with Nvidia selling its H20 HGX product to Chinese companies. If Trump's administration proceeds, they would prefer to supply Chinese companies with slower hardware [8].

For updates on news, analysis, and reviews, consider following Tom's Hardware on Google News [9]. Stay informed and stay ahead!

[1] U.S. to Share Revenue from AI Chip Sales to China [2] Nvidia and AMD to Contribute 15% of Revenue from AI Sales to China [3] U.S. Government's Unprecedented Move to Regulate AI Sales to China [4] Performance Restrictions on AI and HPC Processors Exports to China [5] Best AI Hardware for Chinese Companies: Nvidia's H20 HGX GPU [6] H20 HGX GPU: A Massively Cut-Down Processor for AI Workloads [7] Hypothetical B100 Cut-Down: A Game Changer for AI Processors [8] China Hardliners' Stance on Nvidia's H20 HGX Sales to China [9] Subscribe to Tom's Hardware Newsletter

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