“We negotiated a little deal,” President Donald Trump told reporters on August 11, about the developing situation with leading chip makers Nvidia and AMD continuing to do business in China. He explained that he originally wanted a 20% cut of Nvidia’s sales in exchange for the company obtaining export licenses to sell H20 chip to China, but he was persuaded to settle at 15%. The H20 chip is “obsolete,” Trump added … “he’s selling a essentially old chip.”
The chips do appear to be quite significant to China, considering that the Cyberspace Administration of China held discussions with Nvidia over security concerns that the H20 chips may be tracked and turned off remotely, according to a disclosure on its website. The deal, which lifted an export ban on Nvidia’s H20 AI chips and AMD’s MI308, and followed heated negotiations, was widely described as unusual and also still theoretical at this point, with the legal details still being ironed out by the Department of Commerce. Legal experts have questioned whether the eventual deal would constitute an unconstitutional export tax, as the U.S. Constitution prohibits duties on exports. This has come to be known as the “export clause” of the constitution.
