US Government to Take 15% of Nvidia and AMD China Chip Sales Amid National Security Debate

Washington D.C. – The U.S. government has reportedly struck an unprecedented deal with chip giants Nvidia and AMD, requiring them to pay 15% of their revenues from certain chip sales in China in exchange for export licenses. This development comes amidst ongoing debates over national security concerns related to advanced technology and the role of private sector leaders like Jensen Huang, Elon Musk, and Jack Ma, who have faced scrutiny from their respective governments.

The agreement allows for the sale of specific chips, such as Nvidia's H20 and AMD's MI308, to China, which were previously restricted due to fears they could bolster China's military and AI capabilities. Critics, including some security experts and lawmakers, have expressed surprise and concern over the arrangement, questioning if a financial payment can truly mitigate national security risks. "You either have a national security problem or you don't," stated Deborah Elms, head of trade policy at the Hinrich Foundation.

Nvidia CEO Jensen Huang has been a vocal critic of U.S. export controls, labeling them a "failure" and arguing they have inadvertently spurred China's domestic chip development. His company had designed less powerful chips specifically to comply with earlier restrictions, but even these faced bans. The latest deal follows extensive lobbying by Huang, though China has reportedly responded by banning domestic tech companies from purchasing Nvidia's AI chips, further complicating market access.

This situation echoes the regulatory challenges faced by other prominent tech figures. In China, Jack Ma, founder of Alibaba and Ant Group, experienced a severe regulatory crackdown starting in late 2020. His criticism of financial regulators led to the abrupt halting of Ant Group's massive IPO and an antitrust investigation into Alibaba, with authorities citing concerns over monopolistic practices, data security, and national security. While China has recently shown signs of easing its stance to boost its economy, the interventions highlighted the state's ultimate control over its tech champions.

Similarly, Elon Musk's ventures have drawn increasing national security scrutiny in the U.S. His close business ties with China through Tesla's manufacturing operations have raised concerns about data security and potential Chinese influence. Furthermore, his SpaceX Starlink satellite internet service is undergoing a national security review by the Trump administration due to its dual-use nature in conflicts like the Russia-Ukraine war, and his acquisition of X (formerly Twitter) sparked debates over content moderation and foreign influence operations. The tweet noted, "One of the most cartoonishly evil things a state can do is crush a champion for National Security Reasons," reflecting a sentiment shared by those observing these government interventions.