Nvidia and Advanced Micro Devices have agreed to give the U.S. government 15% of China chip sale revenue, President Donald Trump said Monday, confirming multiple reports. NVDA and AMD edged lower Monday.
The AI chipmakers agreed to this unprecedented arrangement with the Trump administration to secure export licenses for the Chinese market. The news was initially reported by The Financial Times and later the Wall Street Journal and Bloomberg News. The companies obtained licenses last week for the Nvidia H20 and AMD MI308 AI chips.
"We negotiated a little deal," Trump said at a Monday press conference.
Nvidia had designed the H20 as a lower-level AI chip specifically for the China market to avoid U.S. export curbs. In April, the Trump administration banned H20 exports. In June, President Donald Trump reversed course after meeting Nvidia CEO Jensen Huang at the White House. But no actual export licenses were granted in the next several weeks.
Some observers noted that the deal may run afoul of the Constitution, which bars export taxes or duties. "No Tax or Duty shall be laid on Articles exported from any State."
Nvidia, AMD Stock
Nvidia and AMD stock had rallied on the Trump's June decision to OK H20 and MI308 chip sales. So did Taiwan Semiconductor, which makes Nvidia and AMD chips. Regaining access to the China market will likely still be worth it, but the 15% cut will impact profits.
Nvidia dipped 0.35% Monday while AMD 0.3% after both stocks traded up and down during Monday's session. Taiwan Semi rose 0.1%.
Nvidia stock hit a record high last week, with AMD pausing near a 52-week high. Taiwan Semi stock is consolidating just below all-time highs.
Nvidia stock is on Leaderboard. AMD stock is on SwingTrader. Nvidia and Taiwan Semiconductor stock are on the IBD 50.
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